If you’ve been wondering what I’ve been working on for the past six months – and why there have been less frequent posts here – I’ll be able to show you pretty much any day now. But first, I wanted to explain what we are looking to accomplish because we’re doing something very different than most insurance startups.
I Thought You Were An InsureTech?
We sort of are and sort of aren’t. I am sometimes asked what makes our tech different. The truth is we are not doing anything revolutionary on the tech side.
Everything we’re building has been done in some form in other industries. I find this to be a big positive. It means we have lower execution risk.
The goal of building a new company isn’t to have the most exciting technology. It’s to serve customers better than the options they have today. InsureTech is frankly a terrible name for this movement. It suggests what matters most is the tech, not the product or approach.
Rather, we should call this group of new companies InsureCustomerCentric but that doesn’t sound so good, does it? Perhaps InsureHelp? InsureServe? InsureSave?
InsureTeach
Wait, I got it. It’s so simple. We just need to add a letter! InsureTeach. Now, not every startup can be an InsureTeach. That’s why we’re the first!
To be an InsureTeach, your mission needs to be to help your customer. If you start with that premise, you look at the problem differently than others do.
You don’t start with what tech do I want to build and what can I do with it after. Or what product do I want to sell and how can I convince people to buy it, even if it doesn’t address their concerns. Or how can I create a financial structure that benefits me at the expense of my customer.
Instead, you look for ways to solve people’s problems. And there’s all kinds of problems in insurance. Product, claims, quoting, inefficiencies. The list is long. We all know them.
But Jim and I believe there is a fundamental misunderstanding of how to address these problems. They’re not going to be solved by waving a magic tech wand and claiming victory.
Tech can clearly play a role in improving customer outcomes, but it doesn’t address the underlying issues like that it sucks to buy insurance. And the reason it sucks to buy insurance isn’t primarily because it takes too long or it costs too much.
It’s because people don’t understand what they’re buying and they end up with a product that doesn’t cover what they care about. Worse, insurance companies – old and new – are unmotivated to change it.
Which creates a great opening for loudmouths like me to educate people about a better way forward.
More Than Just A Letter
You can’t become an InsureTeach just by adding an A to Tech. It’s not that simple. You have to live what the A represents.
At Informed, the A is for the Advice we give people. It’s for being their Advocate. It’s for being Authentic. Our business model is based on helping people. It’s based on gaining trust.
It’s not based on how many policies we may sell someday. If we truly help people, the policies will sell themselves. If you don’t believe that, ask USAA.
Sure, we have to monetize that help – don’t worry we will – but if you are genuinely helping people, they will be willing to pay something for that. Hell, they pay 10-15% today to buy a policy from someone who often does nothing more than show them the lowest price!
I don’t worry about how we will get paid. I worry about doing enough to gain people’s trust – and then not doing anything stupid to lose it.
InsureTeach Addresses The Most Fundamental Of Insurance Problems
Sometimes, the answer is right in front of you and everyone ignores it because it’s so obvious you get used to it. The industry has been focused on the wrong problems. They are treating symptoms rather than the root cause.
Nearly every problem in this industry traces back to one root cause: people don’t understand what they’re buying and it’s too hard to get the help you need to figure it out. Just because people rely on an agent doesn’t mean they trust their agent. They rely on an agent because they feel helpless.
It’s sort of like dealing with the auto mechanic. Now, hopefully your insurance agent is more honest than the average auto mechanic, but in both cases, they know you don’t know what the heck they’re talking about and you’ll pretty much agree to whatever they say.
Buying insurance because it’s simple or, dare I say, “delightful” isn’t progress. It’s taking advantage of consumers’ lack of knowledge to sell them what you want them to buy instead of educating them about how to best protect themselves. It’s a disservice.
In the academic world, they call this inability to judge the quality of what you’re buying – even after you’ve bought it – a credence good. You probably recognize it more commonly as information asymmetry. And it causes a lot of problems.
Namely, from the link above, “providers may have limited incentives to increase quality of…credence goods and the resulting quality may be inefficiently low.”
Ending Information Asymmetry
Insurance thrives on information asymmetry. Informed is designed to eliminate it. We want to empower customers to make better decisions. Honestly, it’s ridiculous that it’s so hard to find out whether something’s covered or not or what to expect when you have a claim.
It’s not 1964. Or 1994. Information is available with a click for just about anything. Asymmetry has been decimated in most every other thing you do. Except for insurance.
So that’s why people need us more than they need another insuretech.
Why Us?
Why not us? How many insuretechs have been founded by people who actually know insurance inside and out…and have an insatiable desire to do things the right way rather than the most convenient way?
Frankly, calling BS on stupid ideas is kind of what I have done all my life. 🙂
I think I know how to communicate to others when and how they’re being taken advantage of and Jim and I have the combined industry knowledge to know exactly what the “worst practices” are in the industry that buyers should be made aware of.
Basically, we have the ideal combination of industry insight, willingness to speak out, and business acumen to do this in a way few others could.
What Happens Next?
Later this week, we will release our first version of our website. (It’s actually available now if you can figure out how to find it or, if you just can’t wait, send me a note and I’ll send you the link early.) I’ll have another post out shortly to explain the site and what you can do there.
As part of the site release, we’re going to more formally pursue fundraising so feel free to reach out with interest there, if applicable.
Also, as a reminder, the www.joininformed.com site is still up for those and other corporate purposes (no, it’s not the consumer site, good guess though). We will also start using more regularly the company LinkedIn page if you want to sign up there for updates.
Happy to answer any questions in the meantime and more information to come shortly.
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