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Francois de Lame of PolicyGenius on how to build a digital-first insurance brand
Francois de Lame is co-founder and Chief of Marketing of PolicyGenius
What is PolicyGenius and where did you get the inspiration to create it?
PolicyGenius is an online marketplace for insurance that offers self-directed consumers open access to unbiased insurance information, tailored recommendations, and transparent quotes. PolicyGenius goes beyond what today’s aggregators and online agents offer by providing the best customer experience possible, with engaging educational material, decision support tools, and honest advice in a fully transparent manner every step of the way. We have brought consumer insurance into the 21st century with instant, accurate online quoting and smart digital advice tools to solve the obstacles created by America’s outdated insurance industry.
PolicyGenius is not directly affiliated with any one insurer. Instead, we have vetted and partnered with dozens of the nation’s top insurance companies for our platform. All of our advice, quotes and educational guides are focused on our customer’s needs. PolicyGenius is not a lead-generator, and we will never sell your data to a third party, or make you give us your contact information before you can see a quote. We work with our customers the way we’d want to be treated to ensure they get the best insurance for their needs.
My co-founder and I were inspired to build PolicyGenius after having served many large insurance companies at McKinsey & Company. We were brought in on numerous occasions to help them think about how to reach a more digitally savvy consumer who was not interested in sitting down face-to-face with an agent to talk about insurance. The US insurance industry has historically relied on agents and operated under the assumption that “insurance is sold, not bought”. While this is slowly beginning to change, we didn’t see it happening fast enough. We started PolicyGenius to challenge this mantra and to prove that with smart digital tools and a transparent process, consumers would readily adopt digital channels to research and purchase insurance.
Why is buying insurance so complex and frustrating?
I believe the industry, particularly agents, would like you to believe that it’s complex, thus proving the value they bring. For some insurance decisions — for example, purchasing whole life insurance — I tend to agree that an agent or financial advisor should be involved in the decision making process. However, for many insurance products, this face-to-face interaction is not necessary. The industry continues to force consumers into this heavily-mediated way of doing business, which is not how many of us want to interact with insurance.
Another source of frustration is lead generation, which unfortunately dominates the business models of many online insurance verticals today. Consumers are forced to enter their contact details even if they just want to see a quote, and then they receive multiple sales calls from different agents.
No one in the US has truly set out to create a multi-product independent insurance distribution platform before — one that helps consumers understand how insurance fits into the context of their financial lives. Historically, the customer of the insurance industry has been the agent and this needs to change. The key to success in the next decade is to focus on the consumer. By bringing more transparency to the process and giving consumers the tools to shop for themselves, we believe much of the complexity and frustration can be removed.
Why does it feel like so much less innovation has happened in insurance vs. some other consumer industries out there?
Insurance is a tough industry for outsiders to jump into. It’s heavily regulated at the state level and you need a deep knowledge of the products and processes to be successful. Crucially, you need to have strong relationships with your insurance partners. From day one, we focused on developing our relationships with carriers. They’re the ones who have built trusted brands over many years, something that we knew we would need to leverage in order to succeed.
What makes things harder for new entrants is that not only are you selling consumers an intangible good that they hope to never use, but as a new entrant, consumers will automatically be skeptical of you. If I were to start up a life insurance company today, you’d need to believe I’ll still be around in 30 years in case you need to make a claim.
Because of these constraints, I believe incremental innovation is what will bring large changes in the industry. This is not a particularly enticing proposition for technologists and venture firms looking to turn an industry on its head in 12-24 months. But for those who are willing to play the long game, and who have a clear understanding of where the problems in the industry lie, there is huge opportunity to deliver significant customer value and build a successful business.
As Internet-enabled insurance grows, are we going to see the market structure change? I’m thinking most about the role of agents.
We believe in providing the channel of choice to consumers. What this means is that consumers should be able to choose the channel through which they engage their insurer or agent. Many consumers still prefer to meet face-to-face with an agent and I don’t believe this will ever disappear. However, the industry needs to invest more in opening up digital channels, since for many consumers this is how they want to manage their financial lives. Many in the industry see this as a “millennial” issue, but I believe this is misguided. Across generations, many consumers are now digitally savvy, and therefore, it is imperative that the insurance industry caters to them.
The urgent need for these new distribution channels is compounded by the fact that a large proportion of the current agent force is nearing retirement. Without new channels, insurers are going to find it harder to distribute their products.
It’s hard in general to distribute consumer products and even harder/more expensive to acquire financial customers. How do you think about acquisition? What’s working, not working?
Our focus is on building a long term relationship with a client, such that we’re always top of mind when it comes to them making an insurance decision. We use content to develop this relationship and build trust with a client. In this industry, it’s incredibly important to understand the purchasing funnel and what influences someone’s behavior. By understanding what customers are looking for, and where they might be looking for it, we’re able to target our marketing efforts and tailor our messaging.
Our marketing efforts are focused on building a long-lasting brand that is synonymous with independent insurance advice and shopping, thereby increasing the effectiveness of our acquisition as we scale. The most important aspect of marketing, however, is to provide something of value to the consumer. The service we have created fills a gap in the market and solves a major point for many consumers.
Photo credit: Asim Saeed (Misa Khan) via VisualHunt / CC BY
trov’s Scott Walchek on designing the world’s first on-demand insurance for single items
Scott Walchek is CEO and Founder of trov
What is trov and what was the genesis story? What was the inspiration behind starting it?
Trov is an application and digital insurance platform that together reinvent the way people insure their things by harnessing the information about all they own. Designed for the emerging generations of digital natives, Trov completely redefines the way people protect their possessions by letting them choose just the things they care to protect, and engage insurance for as long as they need it – a year, a month, a week, day, hour…whatever.
Together, the Trov app and platform enable the world’s first on-demand insurance for single items and feature micro-premiums, micro-duration policies, and entirely disintermediated claims – all from a smartphone. This “streaming insurance” will empower numerous new use cases including automatically turning-on protection based on date, time, location, and event.
In 2010, for the first time in history the make up of Global Household Wealth was evenly split between financial assets (cash and its myriad equivalents), and tangible assets (personal and real property) [from 2011 Credit Suisse Wealth Databook]. It intrigued me that while there were innumerable tools for analyzing and managing financial assets, there were no similar and simple tools for managing tangible wealth. That intrigue was followed by a recognition that there was enormous value latent in the information about the things that people own – and if we could capture that information and give people agency over it on their mobile devices, then we could positively impact numerous substantial markets. The first of these market disruptions would be in the P/C insurance space where emerging generations were demanding their financial services be delivered on their mobile devices, on-demand, and a la carte.
Insuring belongings has traditionally been hampered by the inefficiency of cataloguing all our stuff. How does trov change all that? And in doing so, how does the role of insurance change?
One of the biggest problems with traditional home contents insurance is that people pay a set amount of money year on year, without many questions, yet are often unsure what is actually being covered. We frequently hear of incidents when people report claims for their belongings and then their most valuable items are not actually covered.
Trov provides on-demand protection for the things that are important to you and you always know exactly what is covered and in what situations. Instead of trying to document all of your important items after an incident occurs, Trov makes it ridiculously easy to collect and update information about the things that are important to you – as you acquire them. You are then given the option to easily “swipe to protect” the items that are most important to you and then easily “swipe to unprotect” items that you may have discarded, sold or have lost value to you.
Furthermore, we’re working on opportunities for adaptive protection that is adjusted based on your situation. Imagine having insurance for your skis turned ON automatically when the ski season begins and OFF in the Summer, when you no longer need the same level of insurance.
The role of insurance will change from a once-a-year transactional relationship to a more active ongoing relationship with your things – protecting just what you want, when you want – so you can get back to enjoying them.
What were some of the challenges in making insurance as easy as interacting with our phones? How did you solve for them?
Trov is 100% mobile, meaning it has no desktop/browser version. This is a self-applied constraint that has forced us to be very selective in the features we introduce. Furthermore, by keeping the application entirely mobile, it has actually allowed us to introduce more unique features that are only available on mobile devices. These include things like taking photos with the app, detecting location for your home, scanning barcodes and receipts. If we had a desktop version, then none of these features would be possible.
Insurance today is bogged down by heavy process and forms, often requiring the need to talk directly to a person. By moving the entire process to the phone we’re making getting insurance as simple as a ‘1-click’ Amazon purchase. What’s more, claims can be as simple as a quick text message exchange with reimbursement or shipping of a replacement item happening in minutes – instead of days or weeks.
By placing the entire insurance process on a phone, we quickly realized which processes were absolutely necessary and which were simply functions of an arcane insurance model. Needless to say, we discarded what wasn’t necessary and made the entire process much simpler.
What’s in store for 2016 for you and trov?
In 2016, we will begin to roll out our on-demand insurance platform. Limited release launch will take place in Australia and the UK in the first half of 2016.
Photo credit: Seattle Municipal Archives via Visualhunt.com / CC BY
Protect your downside and follow these 20 top insurance startups in 2016
Insurance as an industry has been one of the last to be reimagined in the Internet era. That’s all changing now: entrepreneurs and institutions are investing heavily to turn out the next generation of insurance companies from the ground up. Institutional capital is betting that this new class of insurance companies will make a dent in the multi-trillion insurance industry.
Industry experts like Santander’s Pascal Bouvier point to insurance tech as one of the last, and ripest, fields for investment capital in 2016. Indeed, in 2015, over $800 million of risk capital was invested into startups in the insurance technology, now called, insurtech, space.
Here’s a quick rundown on the state of fintech, investments, and the digital disruption of the insurance industry:
- The US insurance industry accounts for $1 trillion, or approximately 7 percent, of gross domestic product (US Treasury)
- At $831.5 million, investment in insurance tech this year is already up nearly 10 times what it was in 2010 (CBInsights)
- 1 in 4 insurance agents will be gone by 2018 (Insurance Business America)
- 47 percent of households couldn’t cover an emergency expense of $400 (Report on Economic Well-Being)
Insurance technology is a broad field that includes all different types of insurance, distributors, risk and regulatory managers, big data and enabling technology.
One of the things that makes this surge in interest and money backing insurtech startups is that it’s bring driven by outsiders. The same disruptive force emanating from Silicon Valley that’s changing transportation and logistics (Uber), music consumption and distribution (Spotify), and travel and lodging (Airbnb) is now turning its sights on one of the oldest and largest economic sectors: insurance. We’ve seen both industry insiders and talented outsiders enter the industry and expect that trend to continue.
We’ve compiled a list of the top 20 insurance startups worth keeping tabs on throughout 2016. Compiling top lists are tough — like in most fields, there are way more than 20 companies that deserve such recognition. The methodology we used in compiling this list included startups who’ve raised over $2 million, had a strong signal ranking on AngelList, and had a relatively robust Crunchbase profile. We also attempted to create a broad list that was inclusive of different approaches to impacting the insurance industry and therefore, we limited the number of startups doing something similar (say, direct distribution to consumers, for example). So, to that extent, this is a subjective list. For those that didn’t quite fit but were worth noting, we created an Honorable Mention category at the end of the list.
View more lists from Zack Miller
Photo credit: Ninian Reid via Visual Hunt / CC BY