Insurance startup’s $2M success could threaten independents

Insurance startup’s $2M success could threaten independents | Insurance Business

Insurance startup’s $2M success could threaten independents
Coverhound, Google Compare and Wal-Mart dominated headlines in recent months as alternative ways of shopping for auto insurance continued to gain traction and threaten the otherwise stable independent agent and broker channel.

Now, the entrance of a new startup has raised the bar in terms of what consumers can expect – and for how independents will have to upgrade and diversify in order to remain relevant in a digital age.

Insurify, a company developed out of MIT, recently pulled in $2 million in seed from investors after introducing the launch of Evia (Expert Virtual Insurance Agent). The “robo” agent purports to find consumers better car insurance by snapping a photo of a car’s license plate and pulling the resulting information to shop for quotes.

The startup’s model resembles that of Coverhound and Google, but differs in its user-friendly simplicity and the range of carriers it represents (big companies like Progressive, Allstate and AAA are on board). Insurify also represents a partner opportunity to these comparison sites.

While privacy concerns abound, Insurify and similar models are becoming a force to be reckoned with and some – including Warren Buffett’s Berkshire Hathaway – are attempting to build on their success by developing similar approaches to homeowners and commercial insurance lines.

Insurance agents themselves are not unmoved. A recent survey from agency technology provider Vertafore reveals that more than half of insurance agents (54%) feel moderately to seriously threatened by these new entrants.

Guy Weismantel, vice president of marketing of Vertafore, points out that agencies are not standing still, however. Four out of five agencies reported increasing their IT budgets over the last 12 months in order to address these threats, with 47% planning to spend more to advance customer self-service capabilities, while 43% are looking to investments in cloud services and solutions.

Investments in mobile (40%) in the form of mobile-friendly websites and apps are also among technology budgets for agents in 2015.

“The insurance industry is on the verge of disruption in the way we work and do business,” Weismantel said. “New self-service technologies are popping up daily, contributing to the evolving role and future of the insurance agent. Rather than shying away from change, our survey shows that agents are embracing and integrating technologies into their operations to enhance the customer experience.

“The future of insurance is not about displacing the agent; it’s about strengthening and reinvigorating agent services with technology.”