IAG's PropTech Investments Could Pave Way for New Products

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By Alice Uribe

SYDNEY–Insurance Australia Group Ltd. said its investments into property technology startups was intended to collect and analyze data, which could be used to design new products and methods to service customers in the future.

The Australian general insurer’s 2020 minority investment in “propTech” startup Propper was a bet on the fact that rental property management could be done better and cheaper, digitally, said Scott Gunther, Director of IAG’s 75 million Australian dollars (US$55 million) corporate venture capital fund Firemark Ventures.

The proprietary data acquired from Propper was where further value lies for IAG, he said in an interview with Dow Jones Newswires.

“We traditionally just take data and insure a property or insure a tenant. But actually having more insights about customers and the properties, we can actually start to offer improved service and solutions in the future,” he said.

“If we’re clever enough about it, we can actually start adding value beyond just insurance. So by understanding more around that we can start moving, not just from insurance, but also to assurance.”

IAG’s investment into cybersecurity startup UpGuard demonstrates the way insurers can move from being reactive to proactive on a variety of risks, Mr. Gunther said.

“Through our investment with the cyber security start-up, we’re working with our customers to actually help them proactively monitor when there are potential incidents or threats before they can actually occur,” he said.

The UpGuard platform aims to prevent data breaches by helping businesses assess and monitor the risk of their third-party vendors and protect against data leaks. In June, the platform announced a A$25 million Series B-1 funding round with participation by existing investors IAG, Pelion Venture Partners, Square Peg Capital and August Capital.

Firemark Ventures in its five-year history has made 28 investments into 15 startup companies across Australia, New Zealand and the United States. There are currently around 600 propTechs- a catch-all phrase for technology used to streamline real estate processes- in Australia, and Mr. Gunther describes the sector as “hot and growing.”

“The pandemic has changed how we live and work and that, in turn, has changed housing and property in Australia. This environment creates new opportunities for emerging technology,” he said.

Investment into digitally-focused startups are a key way for IAG to consider strategies for serving different cohorts, particularly younger customers.

“We had written our covers in a certain way, but if there’s different lifestyles and different behaviors, we could actually start thinking about how we choose to underwrite,” he said.

Write to Alice Uribe at alice.uribe@wsj.com