Pay-per-mile digital auto insurer Metromile is pursuing what it is calling a “significant” expansion of its use of independent agents to sell its insurance, and it has hired a Travelers Insurance executive to lead the effort.
San Francisco-based Metromile, which began an independent agent pilot program in the second quarter, says the platform already hosts more than 880 independent agents with more expected to be added in the coming weeks.
“Independent agents account for more than 30 percent of all auto insurance sales, and we believe there is significant opportunity to work with them to reach more low-mileage drivers now and in years to come as we expand nationwide,” Troy Dye, Metromile’s senior vice president, said.
Metromile is available in the eight states of Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia and Washington. The company had planned to enter additional states this year but now says that won’t happen until 2022, beginning with Indiana, Colorado, Missouri, Iowa and Texas.
The company’s expanded use of agents works, in part, through an integration with comparative raters such as the EZLynx Rating Engine.
“With the operational testing phase successful, we are beginning to scale sales production in the second half of 2021 by integrating with comparative raters and fine-tuning our incentive structures with our agency partners,” the company said in its second quarter letter to shareholders. “We expect to add to our agent base significantly over the coming quarters, and we will support agents by building the needed integrations and infrastructure.”
Scot Rankin, a 30-year insurance veteran, has joined Metromile as its first-ever Independent Agency Relationship Manager. Rankin, who has been tasked with expanding the agent program, was most recently a sales executive at Travelers and has also held previous leadership roles at QBE North America and MAPFRE, according to his LinkedIn page.
“I’ve specialized in working with independent agents for more than 30 years, so I can attest to their position as a trusted resource for many consumers shopping for insurance. Independent Agents will play a valuable role in educating drivers on the benefits of data-driven insurance, the value of pay-per-mile, and the savings and experience unique to Metromile,” Rankin said.
Metromile is embracing a traditional part of property/casualty insurance sales and distribution that it and some other digital startups initially rejected as old-fashioned and out-of-date.
Root is another digital insurer that has done a U-turn in its approach to independent agents. The company disclosed in its 2021 second quarter shareholder letter that it was scaling its internal sales agent program and piloting a program to provide its digital auto and other coverage through independent licensed agents.
“Root sees an opportunity to further its mission by building its presence in a channel in which one-third of all consumers purchase insurance,” Root spokesperson Tom Kuhn told Carrier Management in August.
Rankin said Root is building additional integrations and infrastructure to support independent agents and significantly scale the channel. Currently, the program offers agents a quote in under two minutes, a dedicated in-house support team, what is billed as an easy-to-use agent portal, and “fast and easy claims” filing for agents’ clients.
Insurance agency and technology consultant Jason Walker told Insurance Journal last week he believes that agencies have been overlooked by insurtechs but he now feels that the market is evolving from a “doom-and-gloom” view of agencies to positively appreciating agencies and the fact that they control so many customers.
“Agents are being called by these insurtechs all day long,” he said.
Metromile is facing the reality, in its own words, that it is operating “in a market where the pre-to-post-COVID-19 journey remains mid-flight.”
For the second quarter, Metromile reported an accident loss ratio of 74.2, up from 65.1 in the first quarter. It ended the quarter with policies in force of 95,314— down slightly from 95,958 the first quarter.
Its second quarter results also showed:
- Direct earned premium in the second quarter of 2021 was $27.8 million, a 22.9% increase from the prior-year period.
- Average annual premium per policy was $1,181 as of June 30, 2021.
- Premium run-rate, defined as ending policies in force multiplied by average annual premium per policy, was $113.0 million as of June 30, 2021.
The company said its business is being affected in the short-term by cancellations related to government-mandated COVID-19 payment extensions; lifestyle changes, including out-of-state moves, vehicle sales and high-mileage driving; product messaging that became less effective during the pandemic; and regulatory delays that impacted timely approvals of pricing changes.
The company said that while it expects the second quarter trends to create “downward pressure” on near-term channel performance and net policies in force growth, these concerns do not meaningfully impact its view of the long-term opportunity ahead for its business.
“Despite the increase in miles driven, the majority of drivers in the U.S. remain low-mileage drivers by industry standards. As many U.S. workers settle into new routines — and benefit from their employers’ rollout of remote, flexible and hybrid work models — we believe that pay-per-mile continues to be a natural fit for their auto insurance needs,” the firm said.
It said tests of its new “post-COVID-19” messaging geared to low mileage drivers and savings have been successful and it expects channel performance to rebound in the third quarter of 2021.
“The market is shifting, but we believe we have the proper fundamentals in place. We are investing in the right growth levers to meet this evolving opportunity,” the company told shareholders.
Metromile became a public company in February in a merger with a special purpose acquisition company (SPAC). Some of Metromile’s insurance products are underwritten by insurers in the National General Insurance Group while others are underwritten by Metromile Insurance Co. Metromile also offers a home and auto bundled product in a partnership with digital home insurer Hippo in some states.
Editor’s Note: This is an expanded version of a story originally reported by Carrier Management.
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