Online personal insurance seller CoverHound is adding business insurance offerings— including workers’ compensation and commercial auto— to its online platform at CoverHound.com.
The site is starting by focusing on small businesses with fewer than 20 employees and plans to gradually expand to cover larger businesses.
CoverHound will offer coverage from Chubb, Liberty Mutual, Berkshire Hathaway Direct, Hiscox, Progressive and Employers, with other carriers set to join in the future. Customers can start the quoting process on desktop or mobile, and connect by phone with a licensed insurance advisor.
CoverHound CEO Keith Moore said that CoverHound aims to be “a trusted advisor for curated choice” and offer the ability to deliver a “bindable rate” that isn’t subject to change, two features he believes sets the online agency apart from other websites promising to deliver real-time insurance quotes to small business owners.
“We don’t want to inundate a shopper with too many choices,” he said during a recent interview with Carrier Management. “Even though we work with a great number of carriers on the back end, we curate that choice down to two to four.” Moore said that he learned about a shopper’s preference for narrow choices and for an advisor to guide them to the right one from a previous position with online lender, Lending Tree.
“Having once been a startup ourselves, CoverHound understands the growing pains of a small business,” Moore said. “We’ll be there every step of the way to support business owners and ensure they get the coverage they need to satisfy third-party and legal requirements, and protect their property, customers and investment.”
Chubb (formerly ACE) and American Family Ventures are among the financial backers of CoverHound, which raised over $47 million last year in two funding rounds.
CoverHound provides six types of insurance coverage for small businesses: general liability, professional liability, businessowners policy package (BOP), workers’ compensation, commercial auto, and cyber insurance.
CoverHound plans to go live with its CyberPolicy.com website later this year, allowing small businesses to shop for cyber insurance and cybersecurity tools together.
Moore (who along with other insurtech CEOs will be profiled in the next edition of Carrier Management magazine) says his company is focused on one particular metric to drive his own six-year-old growing business forward. The metric is the net promoter score, which measures how likely a shopper is to refer friends and family.
Plenty of Competition
CoverHound is far from alone in targeting the small business market online.
Investors including XL have given $12.2 million to fund Embroker, an insurance broker offering a cloud-based risk and insurance management system for small and mid-sized businesses. Embroker promises to give its customers tools to buy, compare, analyze, manage and store all of their insurance policies and data in one place.
Insureon, an online agency for small business insurance, raised more than $30 million last October. In July, it launched a managing general underwriting agency with capacity from various syndicates at Lloyd’s to handle wholesale business.
Seattle-based AssureStart, backed by the American Family Mutual Insurance Co., which sells to business with fewer than 30 employees, is backed by the American Family Mutual Insurance Co. Insurer Hiscox has been expanding its online platform for small businesses for a number of years.
Last December, Berkshire Hathaway Inc., which owns GEICO, created Berkshire Hathaway Direct Insurance Co. to sell insurance directly to businesses over the Internet. The new insurer planned to initially focus on workers’ compensation and business owners’ package policies.
Two other recent InsureTech entrants in the small business insurance space include CoverWallet and Next Insurance.
In April, American International Group, Bermuda-based Hamilton Insurance Group and affiliates of hedge fund firm Two Sigma Investments announced plans to create a technology-enabled insurance platform for sales to the small to medium-sized enterprise (SME) market.
A number of independent agency carriers have joined the TrustedChoice.com online commercial insurance platform backed by the Independent Insurance Agents and Brokers of America (Big “I”) to sell small business insurance.
Bolt has for several years been providing online access to personal and commercial lines products from national insurance companies, managing general agencies and wholesalers.
The small commercial lines market is both growing and increasingly competitive. A report from McKinsey & Co. predicts the competition in this market will intensify as more small business customers show they are open to buying via digital channels and as more large insurance carriers enter the field. While a segment of small commercial insurance buyers will always value independent agents, an increasing percentage are open to the direct route and may only be using agents to close a deal because direct binding isn’t readily available, according to the report.
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