Price-centric culture transfers risk back on to consumer

Price-centric culture transfers risk back on to consumer | Insurance Business

Price-centric culture transfers risk back on to consumer
Online insurance comparison is a growing industry in the US. Insurtech platforms are changing the way consumers shop for insurance by offering quick comparisons between rates and coverages at the click of a button.

However, lots of insurance comparison platforms have a price-centric culture that’s not always in the best interests of the consumer, according to Keith Moore, CEO of San Francisco-based CoverHound, an insurtech leader in both personal and commercial insurance.

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“A downside of the US market right now – and we see it in the European markets as well – is that a lot of consumers are driven by ‘price-price-price’ because all the advertising they see is very price-centric and time-driven, but that’s not necessarily a good thing,” Moore told Insurance Business.

“Anybody can bring their insurance premium down by reducing their coverages but that simply means the risk is transferring back on to the consumer.”

A consumer who takes on more risk for a cheaper premium might start to resent a price-centric distribution channel if he/she has to make a costly claim. This resentment could ultimately lead to loss of business and poor customer satisfaction rates.

Effective digital distribution and customer service is at the core of the CoverHound model, explained Moore. The company has rejected spreadsheet distribution (listing reams of coverage options and rates) and adopted a more focused approach, offering customers three or four of the ‘best’ products to choose from.

“We don’t want to spreadsheet because we’ve found that when people are truly shopping in comparison mode, they want only the best options rather than an overwhelming selection,” Moore commented. “Our whole approach is to be fast, accurate and actionable online, while also being available for the customer, the broker or the carrier if they need us.

“Our number one metric as a company is net promoter score (NPS), which we use to make sure that customer service levels remain high and that product choice, innovation and distribution are as positive and digital as possible.”

Successful digital distribution works best alongside personal availability and broker-type services if the customer requires additional support, said Moore. As CEO of CoverHound with 25 years of experience in the insurance industry and a team of experts behind him, Moore is leveraging “all the positive learnings from the insurance space” and molding them into a digital solution.

“Brokers and agents can think about how to use their expertise and experience to innovate their businesses through digital distribution,” Moore added.


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