Imagine this: You have just bought the luxury watch of your dreams. You pat yourself on the back and say, “You’ve made it”. The next day, you lose the watch or, worse, it is stolen from you. Apart from being traumatic, this scenario, though improbable, is still unfortunately very possible in this day and age.
The next thought: Is the watch insured? In response, I wondered whether many people actually insured their luxury watches, particularly those of a certain value, say, US$10,000 ($12,815) and above. Recently, an interesting start-up called KoverNow announced a partnership with the Watch Exchange, a reputable watch dealer in the secondary luxury watch market, to provide a digital Insurance solution for its watch customers. Stephan Kaiser, CEO and co-founder of KoverNow, aims to change the way we look after high-value items. Beyond watches, its coverage extends to jewellery, handbags and even cameras.
KoverNow offers digital insurance for luxury watches. Through its app, KoverNow provides instant quotes based on the manufacturer, model and purchase price
Kaiser, a German national who has lived in Asia for many years, started in investment banking, covering financial services for over twenty years. One day, he felt that he had spent enough time in corporate life and wanted to do something for himself. Kaiser started thinking about the spectrum of financial services offered, from asset management, payment services, to robot advisers, and looked at the level of digitisation in each of these segments. He asked himself which presented a gap in the market, or an opportunity to make the most impact. He eventually picked insurance, which he felt “significantly lagged digitisation” and chose the Property & Casualty (P&C) category within it. Kaiser says he wanted to create something that closely mimics the experience you have with a banking app.
On expanding to Southeast Asia. Kaiser says it was a no-brainer — he is familiar with Asia, having spent time working there in banking. He pointed out a larger reason. Of the approximately 650 million people in Southeast Asia, about half are aged 30 or younger. This young demographic, or what he refers to as digital natives, would be very comfortable using and evaluating services on a smartphone, which aligns perfectly with his idea of providing KoverNow’s insurance services via an app. Kaiser also highlighted that Asia has traditionally been one of the main drivers of the luxury industry, with a healthy appetite for luxury goods consumption, which he says would provide a good tailwind for his start-up.
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In deciding on the product, Kaiser mentioned he followed the Blue Ocean Strategy, which he refers to as essentially choosing an uncontested market space, with opportunity for higher profitable growth, or choosing what he described to me as “the idea to do something in an area where you don’t have five sharks around you that eat your lunch.” Kaiser decided to focus on Specie Insurance, a highly specialised niche policy that protects high-value portable assets that standard home policies typically exclude or limit. However, Kaiser did not want to become an insurer and decided to partner with trusted Insurance companies. He wanted to be an enabler. “The value-add for KoverNow”, as Kaiser puts it, “is being an intermediary.” His vision is to digitise the insurance process, offering fast, convenient, easy coverage through an app that he claims you can do “in three MRT stops”.
With KoverNow’s HQ in Singapore, he and his team have gone ahead to establish the company’s credentials: being a licensed Corporate Insurance Agent (in Singapore and in Hong Kong); being a member of the Singapore Fintech Association as well as a member of the Singapore Business Federation; partnering with MAS-regulated insurance carriers that underwrite their products (Monetary Authority of Singapore). The underwriter for KoverNow’s partnership with Watch Exchange is AXA XL, a dedicated P&C and speciality risk division of the global insurance giant AXA.
In Hong Kong, KoverNow has a partnership with Aristo Watch & Jewellery (which primarily deals in Richard Mille watches) to offer digital insurance for its luxury timepieces. Interestingly, Kaiser tells me that KoverNow’s popularity took off initially for camera insurance coverage in Singapore. One contributing factor is KoverNow’s large database of camera bodies and lenses, both new and old. Through the app, KoverNow provides instant quotes based on the camera’s make, model and purchase price (the same goes for lenses). The policies are also backed by trusted underwriters (QBE Singapore).
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Operating in the insurtech space, which refers to the use of digital tools and solutions to modernise and streamline traditional insurance industry processes, one can’t help but wonder whether demand would prove healthy, despite the app’s aim to provide fast and convenient protection. A watch collector friend who has a healthy collection of high-end watches from independent brands but prefers to remain anonymous says two key considerations for her are how much the premiums are, and the conditions governing successful claims; after all, this is what every prudent person considering buying any form of insurance should find out in the first place.
Kaiser says Asia has traditionally been one of the main drivers of the luxury industry, which provides a good tailwind for his start-up
On the issue of protection against possible theft, she feels that living in Singapore is rather safe and added that the independent watch brands she loves are rarely targeted as they are harder to resell. So, how about when she goes overseas? To which she jauntily replies, she seldom carries her expensive watches overseas, and would prefer to wear a nondescript watch. If she does bring one on a trip, she exercises extra care and would never post real-time photos online. In short, while she feels secure, she concurs that it makes good sense to insure your prized timepieces. She also adds that as far as she knows, not many of her collector friends insure their watches, although it may be a good idea to do so.
While many collectors spend years researching and acquiring the perfect watch, protecting it is often an afterthought. Perhaps it may be worthwhile to give some consideration into preserving that investment.
