The process of booking a vacation looks a lot different today than it did 20 years ago. Since then, the traditional method of calling a travel agent to book a trip has been largely replaced by websites like Kayak, Expedia, and others that allow users to quickly compare prices and purchase flights, hotels, rental cars, and more with a few clicks.
Now, a newer generation of companies is trying to bring the same sort of speed, convenience, and transparency to car insurance shopping. This week, auto insurance-comparison startups The Zebra and Insurify are both putting their feet on the gas, thanks to funding rounds of $17 million and $2 million, respectively.
“Buying insurance is still as bad as buying an airline ticket was 15 years ago, often requiring 40 minutes on the phone with an agent,” says Snejina Zacharia (pictured above), co-founder and CEO of Cambridge, MA-based Insurify. With her company’s software, she says, “drivers can compare accurate insurance quotes, in real-time, while they are at work, on the go, or in between spending time with family and friends.”
Zacharia’s comparison with the travel industry isn’t surprising. Her husband and Insurify board member, Giorgos Zacharia, has worked at Kayak for eight years, including the last two as chief technology officer.
Insurify’s concept is similar to Kayak, in that it allows users to quickly compare prices from many car insurers. Visitors to Insurify’s website enter personal information that has a bearing on their coverage, such as if they are over the age of 25, single or married, own a home, or have children who drive. Insurify’s software analyzes the person’s “risk profile” and serves up a list of the most affordable options tailored to the user.
CEO Zacharia says Insurify’s recommendations go beyond price to offer quality metrics, such as by displaying user reviews of insurers and explaining additional features of plans, like 24/7 roadside assistance.
Consumers “care about having a trusted advisor so they can understand how much coverage is good,” she says. “Am I over-insured or underinsured? What are the tricks an agent might not be willing to tell me that could easily save me $300 to $400, even if I stick with my current carrier?”
On the other side of the equation, insurance companies and tech startups are trying out new approaches to selling policies and analyzing customer behavior. Together with consumer-facing efforts like Insurify, these approaches may foretell big changes in the industry.
Founded in 2013, Insurify today launched its online car insurance quote service publicly and announced a $2 million seed funding round led by Rationalwave Capital Partners. It also unveiled a second product, dubbed Evia, which delivers car insurance quotes via text message.
Users text a photo of their vehicle’s license plate to a phone number managed by Evia, a patent-pending “expert virtual insurance agent.” Evia’s software scours millions of online records to verify personal information and driving history, then texts the person insurance policy quotes and other recommendations. Insurify says Evia, which incorporates machine learning and natural language processing technology, can “explain complex insurance jargon clearly.” But if the user asks a question that the software can’t answer, Evia will transfer the conversation to a human insurance agent.
Evia has some traits in common with Boston-based Lola, which is developing a travel-booking mobile app that will combine software and human travel agents. That startup is led by Paul English, co-founder and former CTO of Kayak.
“People are more likely to respond to a text than to e-mail,” Zacharia says of Evia. Combining “text communication with the automation of having technology to do the work of an agent is even more powerful. It’s personal and it’s convenient.”
Insurify needs to prove that users agree, but it will get a chance with a limited public testing run for Evia that just got underway. The 13-person company’s service is currently available in 30 states and allows users to compare quotes from 82 insurance carriers. Those include Travelers, MetLife, and Safeco, as well as independent agencies that sell policies from multiple insurers, Zacharia says.
By comparison, The Zebra’s online auto insurance comparison service is available in all 50 states and incorporates rates from more than 200 insurers. The four-year-old, Austin, TX-based company says it served more than 3.5 million drivers last year.
Zacharia says Insurify is making progress in its efforts to expand to all 50 states and sign up more insurers. “We are adding new carriers every month,” she says.
Insurify’s Web and text message products don’t currently allow users to purchase the insurance directly; after choosing a quote, they are connected with an insurance agent on the phone to complete the transaction. (Insurers pay Insurify a fee when one of its users buys an insurance policy.) In the future, Zacharia says, she wants to make it possible for users to purchase insurance right on Insurify’s website, although she’s coy about adding that feature to Evia.
The seed money should help Insurify continue advancing its products, but it will have its hands full standing out amongst better-funded rivals like Google, which launched an auto insurance price comparison website last year; San Francisco-based CoverHound, which has raised more than $53 million from investors; and The Zebra, which has raised more than $21 million.
The Evia text-messaging product could be a differentiator for Insurify. The back-and-forth between users and the virtual agent plays into what Zacharia sees as a “huge trend of conversational commerce.”
And unlike CoverHound and The Zebra, Insurify doesn’t plan to hire its own staff of licensed agents working at call centers, Zacharia says. She says that frees up Insurify to focus more on technology and improving user experience (although we’ll see if users wish they had more human support from the company).
If Insurify has success with auto insurance, Zacharia wants to eventually add other types of insurance—like home, motorcycle, and even health—to its search capabilities. “We’re on a very exciting journey,” she says.
Indeed, it’s still early days for Insurify and its competitors. If the travel search industry is any indication, companies in the online insurance comparison sector likely have years of growth, pivots, flameouts, and consolidation ahead before the dust settles.