The 100% self funded US insurtech glovebox announces exclusively on Digitalscouting something special. But before going to that, we used the opportunity to ask this group of insurance sales veterans a few questions on the state of the agent and agency system in the US, the relationship between insurtech and fintech and what we all could learn from it.
What’s the story behind GloveBox? What inspired you to create your business model coming from the agency world?
GloveBox is a company that began from the grassroots of today’s insurance agency world in the US. It’s a machine that is fully invested and driven by sales, but one that has seen a lack of technology to support the backend for clients, agencies and carriers. The GloveBox team’s initial focus was on the independent channel, which is attracting a growing market segment because of the ability to have an agent shop multiple carriers to find the very best price and product to fit the risk. The channel, however, was missing the aggregated service aspect to fit this amazing business model, and thus GloveBox was created to accommodate the rapidly growing pressure of on-demand service that consumers expect. It really is the perfect marriage that makes the independent insurance channel a complete ecosystem.
Do you see an application for GloveBox outside of the independent channel?
Absolutely, as conversations with many more carriers have come about over the past weeks, GloveBox has realized that there are problems with the other three channels of insurance that could easily be solved with this aggregated product.
The first one is the captive space, where they are experiencing over 50% of their millennial policyholders opting to split policies between different carriers. This percentage is increasing by 2.5% each year and will only accelerate with the evolving ease of shopping for insurance. With the separation of policies, GloveBox is a perfect fit for the consumer.
The second one is “internet” companies who don’t utilize agents and most of the sale is self-service. While some offer only auto, others offer home but are very limited on the product. With these types of companies, we see a huge segment of their policyholders splitting between different carriers. For instance, you may choose Geico for your auto policy but still may want an agent to write your home for the expertise and go to State Farm. Now GloveBox comes into play for the servicing on these policies.
The last segment is one the GloveBox team is very excited about, and that’s the insurtech carriers. These are ones that we see are really amazing with technology, but are also segmenting the market with their products. Some only offer home insurance and some only offer auto. GloveBox is a value in marrying the insurance experience for the policyholders while also getting these newer brands on the same stage as their larger incumbent leaders.
Some said that the relationship between insurtech and fintech is on the rocks but we assume that GloveBox combined these 2 say in policy & product payments. What are your 2 cents on this?
There is a huge opportunity to marry insurtech and fintech when it comes to GloveBox. The whole spirit of the technology is aggregating frustrating tasks like dealing with your insurance. This includes making payments on your policies which up to this point, is somewhat of a broken process. We see technology leaders like USAA already offering a combined experience of your bank account and insurance on once centralized app, and GloveBox plans on mimicking this approach, but again encompassing all carriers and banks.
You think, in which segments of the insurance and finance are having remarkable breakthrough in terms of innovations and digital transformation.
The most exciting breakthroughs I am seeing on the insurtech side, beside GloveBox of course, are both the front end experience of buying insurance in addition to claims handling and automation. With regards to the front end buying experience, the way that these new insurtech carriers have made the buying process almost fun and dummy-proof is exactly what the consumer wants and needs. It makes them feel like they aren’t being taken advantage of, but instead, are being given the information in an easily digestible fashion to make educated decisions.
One thing I would like to see is insurtech carriers make the decision to offer brokerage products. Speaking directly from an agent perspective, quoting policies in systems can be very challenging. If insurtech carriers could replicate the experience they provide consumers to agents quoting policies, they would win a significant amount of business purely on ease. With claims, the GloveBox team as agents saw firsthand the frustrations and stress that were triggered by an event. It wasn’t just about the damage, but the fear of the process. There are some amazing insurtech companies rolling out that focus on automating this process, from US players like Fly Reel on homes, to DropIn for auto. Also international rising stars like Shift Technology out of Germany. GloveBox is very excited to integrate technologies like this into their user experience for increased user convenience.
That trends do you see in the US insurance industry and the different regions?
Most of the trends I see on in the US insurance market focus around incumbents working to digitize their experiences (some faster than others) in order to start winning in the millennial and Gen Y who are rapidly becoming the largest segment of insurance buyers. Captive insurance carriers are trying to figure out the best course of action to preserve the retail agent in their models while remaining profitable. The independent carriers are all in on the growing the channel, with brands like Nationwide getting rid of their “exclusive” channel and going 100% brokerage. This is good news for independent agents as the commitment to the channel and its emerging tech (GloveBox) is gaining momentum. Insurtech carriers are winning in the early adopter phase which is great to see. They are creatively putting out products that would rival the Apple/Tesla following which basically means it’s just the cool thing to do. GloveBox aims to help them create longevity in their brands, cementing them alongside of the long running incumbents.
Your top 4 tips for startups and for those young people who want to start with insurtech industry?
The first tip is look yourself in the mirror and ask, does my product help the consumer and will they care? You need to think if a consumer is going to break the monotonous chain of the traditional buying/servicing they are used to and what will trigger them to want to do so.
The second tip is, if you aren’t a developer, find a development team that truly believes in what you are doing and also doesn’t let you spend on money on ancillary things that are shifting focus away from getting an MVP (minimum viable product) to market.
The third tip is… Just go for it! Don’t wait to see what the market does or what is going to change with you personally. Action is everything, EAT.SLEEP.BREATH your product and vision for what it’s going to be. As startups, sharing our visions is much like an artist during a painting. It’s not beautiful yet but let me tell you what it will look like.
The fourth tip is stay self-funded as long as you can. GloveBox is 100% self-funded and will continue to do so for as long as possible. You must have the philosophy that you aren’t going to experiment with other people’s money. Lance Juniper, CEO of Juniper Labs gave us some great advice. Don’t take investment dollars until you have a clear plan on how you are going to make money on it.
What is next from GloveBox?
HUGE announcement coming from the GloveBox team. We are proud to say that Scott McNealy, co-founder and former CEO of Sun Microsystems, has agreed to join GloveBox’s advisory board. This means that a tech giant is so intrigued by the insurtech space and what GloveBox is going that he couldn’t help but bring his expertise and wisdom to this movement. The team is humbled and elated to have him on the project. Insurtech will be much better off for it!
Thank you Ryan for this fast lane interview even with the short notice – Cheers!