InsuraGuest Technologies Inc. (TSXV: ISGI) continues to add new revenue streams with the most recent announcement, on September 21, 2021, of a strategic alliance with SUITELIFE Underwriting Managers. The Company is a division of Ryan Specialty Group and a provider of insurance coverage and other services to hotels, resorts and vacation rental companies.
From October 2021, organizations insured by SUITELIFE will be able to become preferred clients of InsuraGuest, while also giving InsuraGuest access to SUITELIFE’s portfolio of more than 700 hotels and ensuring its credibility in the hotel industry.
InsuraGuest will integrate its proprietary API into a hotel’s property management software system and will be able to automatically attach InsuraGuest coverage to each booking, allowing hotel users to transfer certain liability exposures to InsuraGuest Hospitality Liability covers. This can reduce a hotel’s loss rates and risk profiles, while potentially lowering its general liability policy premiums.
The InsuraGuest coverage fee of $ 4.95 per night is activated when a guest checks in and provides coverage on a daily basis, until the guest leaves the room. The fees provide a win-win revenue sharing opportunity for InsuraGuest and the hotel.
InsuraGuest has targeted the hospitality and vacation rental industries as initial niche markets and markets on-demand insurance products that have been developed specifically for these industries. As the post-pandemic world of Covid-19 reappears after the 2020 lockdowns, the devastated hospitality sector is on the verge of a rapid and massive rebound as consumers and businesses rush to resume their normal lives before the business and leisure travel pandemic. InsuraGuest is well positioned to capitalize on this rebound.
The company has quickly gained traction in recent weeks with a number of integration deals with vacation property management companies in addition to the development of Suitelife, including OwnerRez, TravelNet, iGMS and Lightmaker Property Management (LMPM). A key aspect of InsuraGuest’s growth strategy is to integrate its proprietary API into the customer management systems of as many vacation property management companies as possible to facilitate exponential revenue growth. The main benefit for property managers is that they can use InsuraGuest’s insurance coverage as their primary no-fault medical policy with a property rider to protect them from claims made by clients.
Mr. Reed Wright, President of InsuraGuest Technologies, recently said: “The vacation rental industry grew eight-nine percent (89%) last year. So our goal going forward is to connect to as many Vacation Rental Property Management Systems (PMS) as possible. The more we connect to PMS systems, the more we can access property listings and the more InsuraGuest insurance products we can sell.“
By providing property management service providers with an additional profit center as well as reduced liability exposure, InsuraGuest will not be viewed as a threat. The InsuraGuest revenue model is again based on a per night charge of $ 4.95 for hotels and $ 9.95 for vacation properties, which is shared by the property manager and ISGI.
As an example (for illustration purposes only), iGMS has 127,365 managed vacation property listings in its portfolio. Assuming only 10% penetration in these listings and assuming full occupancy, this could translate to gross revenue of up to $ 46.3 million, from a single vacation rental service provider.
Add in the revenue from the other vacation rental platforms that InsuraGuest is integrated with, and it becomes a very exciting and compelling aspect of recurring revenue and profit potential for InsuraGuest and its shareholders.
As the process of integrating the InsuraGuest API with the various PMS systems is completed, revenues should start to increase. This bodes well for the future of the business as more hotels and vacation property managers continue to adopt ISGI insurance coverage for their properties.
It would be reasonable for InsuraGuest shareholders to expect that as revenue growth and profitability accelerates there would likely be a proportional positive impact on the valuation of the company due to its current modest market capitalization of $ 22.6 million.
FULL DISCLOSURE: InsuraGuest Technologies is a client of Canacom Group, the parent company of The Deep Dive. The author was paid to cover InsuraGuest Technologies on The Deep Dive, The Deep Dive having full editorial control. In addition, the author personally owns shares in the company. Not a buy or sell recommendation. Always do additional research and consult a professional before purchasing a title.