One of Canada’s largest wealth managers has invested $10 million in online used vehicle reseller Clutch Technologies. Quebec based iA Financial Group said last week it entered into the partnership with an eye toward expanding sales of its extended warranty and related guaranteed asset protection (GAP) products.
“This investment enables iA Financial Group to develop its expertise in selling products on an entirely online basis,” iA Financial notes in a July 5 press release.
“Clutch customers will now enjoy a simple and complete experience in a single online transaction, from purchasing a vehicle to selecting certain types of coverage.”
Tech startup Clutch, founded in 2017, reported its online platform generated more than 8,000 used vehicles sales in 2023. The investment by iA Financial provides a capital infusion for the company which, in early 2023 laid off about half its workforce in a move related to timing of Series C investment, according to a January 2023 letter from Clutch’s CEO.
Commenting in the July 5 release, Clutch CEO Dan Park notes the iA Financial partnership allows his firm to offer what he calls best-in-class warranty and insurance products to the firm’s customers.
“With this strategic investment in Clutch, we are adding online sales as a new product distribution channel to our current extensive network of automotive dealer services,” Pierre Miron, iA Financial Group’s executive vice president and chief growth officer of Canadian operations, says in the release.
“As a result, we are well positioned to serve consumers in their preferred way when they purchase vehicles and insurance products.”
Covering incidentals
Last summer, the Insurance Council of British Columbia took up consultation on sales of incidental insurance and floated the idea of a new restricted licensing framework in the wake of the province’s Bill 37. The 2019 bill enabled a restricted license regime to let businesses sell insurance products incidental to their ordinary business.
A 2022 consultation paper from the B.C. Finance Ministry did specifically include sales of equipment warranty insurance, GAP insurance and credit protection insurance by automobile dealerships.
As far back as 2008, a paper titled, ‘Incidental Selling of Insurance,’ was tabled by The Canadian Council of Insurance Regulators (CCIR) and The Canadian Insurance Services Regulatory Organizations (CISRO).
It explored things like suitability and documentation, coverage and claims, potential conflict of interest, disclosure requirements and availability of statistical information related to the incidental selling of insurance.
The paper said many sellers of ISI products were viewed as having no obvious incentive to ensure product suitability to consumers, but that consumers might not realize this.
Feature image courtesy of iStock/ArtmannWitte
