This week we have Tom Coffey from SureUp. They are the robo-advisor for insurance consumers.
Our questions are in bold.
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Who are you and what’s your background?
Growing up I was a caddie (i.e. I carried golf bags) which got me in front of a reinsurance big shot and led to a summer internship with the broker Benfield (now Aon Benfield). I stuck with it and spent roughly eight years with Benfield / Aon Benfield.
It was a great learning experience. I believe being a reinsurance broker is the best way to learn insurance.
But I saw headwinds for the reinsurance industry. I was bored and didn’t feel in control of my destiny, so I left Aon, moved to Austin, TX and enrolled in the MBA program at the University of Texas’ McCombs School of Business.
It was as a grad student that I had the idea for my current venture, SureUp.
What is your job title and what are your general responsibilities?
I’m the founder of SureUp. SureUp is an early-stage company, so I wear a lot of hats and every day is unique.
A few things I’ve done in the past few days include: collaborating with our designer regarding new icons for the website, helping our developers troubleshoot a bug in our recommendation algorithms, re-designing the business cards, writing marketing copy, writing blog posts, hiring an editor to help with written content, and meeting with insurance company partners to name a few.
Can you give us an overview of your business?
SureUp is a robo-advisor for insurance consumers.
Give our robo-agent your information and in as little as four minutes you’ll get quotes from competing insurance companies.
But you’ll get much more than quotes. You’ll get advice, so you’re not simply getting the cheapest policy but the best policy.
Our robo-agent acts as a matchmaker scoring each insurance offer based on how it fits your individual wants and needs.
Simply buy one of the top matching policies and you can be sure you’re getting the optimal coverage, from an insurance company with a low complaint ratio, and a high financial strength rating, at a competitive price.
We’ll be launching an auto insurance product in the coming weeks. And rolling out a home insurance product within a few months.
Tell us how you are funded.
SureUp is bootstrapped.
Why did you start the company? To solve what problems?
When I first started driving I was on my parents’ insurance policy. Then I lived in a city where it didn’t make sense to own a car. So it was only a few years ago when I moved to Texas that I shopped for auto insurance for the first time.
And I thought the user experience was horrible. Comparison shopping sites are still relatively unknown in the US, so I spent a lot of time gathering quotes.
And even if I had used a comparison shopping insurance site, the only thing they compare is price.
There were no online services that would gather competing quotes and offer advice to help you select the right quote.
Though auto insurance wasn’t something I focused on as a reinsurance broker at one point I memorized the entire auto insurance policy for a CPCU exam. And I had a very good general understanding of insurance. So I thought if I’m confused by the coverage options, the average consumer must be even more confused.
I saw this as an opportunity.
I knew insurance companies didn’t want to compete on price. And I knew there was a significant segment of insurance consumers that wanted more than a cheap price – they wanted peace of mind, knowing they had got the right policy coverage from an insurance company they could trust.
So I decided to create a marketplace that brought together consumers who understood that insurance wasn’t a commodity product and top-quality insurers who would appeal to these discerning consumers.
Who are your target customers? What’s your revenue model?
SureUp is an insurance agency. We’re authorized to sell insurance on behalf of MetLife, Progressive, Safeco and Kemper and will add more insurance partners as we grow.
As an insurance agency, SureUp receives a percentage of each customer’s insurance spend.
SureUp’s target customer is 28-40 year old, single, college educated, professional females.
We want customers young enough that they are comfortable with, and likely prefer shopping online.
Single females because behavioural finance suggests that this demographic group is most risk averse (and by reducing the emphasis placed on price and increasing emphasis placed on policy and insurer quality SureUp reduces insurance risk).
And SureUp targets college educated professionals because we’re looking for customers who have both the need for better insurance coverage and the means to pay for it.
If you had a magic wand, what one thing would you change in the banking and/or FinTech sector?
Insurance companies should have websites for their agents – agent portals – that allow agents to quote, issue and service policies.
If I had a magic wand, agents would be able to do everything they can do via the agent portals with an API.
What is your message for the larger players in the Finance industry?
This message is for insurers who write through independent agents…
I understand the need to keep an eye on quarterly earnings. And most of your current revenues come from your long-time agents. But the insurance industry is changing quickly. And the pace of change will only accelerate. Many of your top agencies of today are not willing or able to make the changes necessary to be your agents of tomorrow. This means you must be willing to work with agencies that look different to your traditional agencies and you must equip them with the tools (i.e. technology integrations) they need to succeed.
What phone are you carrying and why?
Moto G 3rd Generation (2 GB model). This is my first Android phone (Apple is slipping hard) and I’m very happy. I cannot believe you can get this much phone for $150 (retails for $229 but I bought it refurbished because I’m an unabashed penny-pincher).
Where do you get your industry news from?
Can you list 3 people you rate from the FinTech sector that we should be following on Twitter?
@FGraillot – VC at AXA Ventures and prolific tweeter
@MCins_ – consultant at Bain focused on InsurTech
@tjcoffey4 – yours truly, I’m new to Twitter so I’m still a hidden gem 😉
Can you suggest the name of an Angel Investor or VC that might be interested in being profiled?
SureUp is a bootstrapped company and I’m wary of taking money from anyone other than customers, so I’m probably not the best person to ask.
What’s the best FinTech product or service you’ve seen recently?
I’m a fan of Able Lending. Able is also an Austin, TX startup, I think they have a unique model and I’ve found their founders to be very likeable (I recently interviewed co-founder Will Davis at one of the Austin Fintech Meetups).
Finally, let’s talk predictions. What trends do you think are going to define the next few years in the FinTech sector?
The FinTech sector will be affected by the same trends affecting the overall economy.
In the broader economy we’re seeing “software eating the world” as labor is increasingly being displaced by software.
The thinking used to be that skilled labor would be spared. But, with advances such as self-driving cars and Deep Mind’s Go victory, it’s becoming clear that software will be able to perform increasingly complex tasks and move its way up the labor food chain.
The financial services sector is not immune. At hedge funds, human traders are being replaced by algorithms. For retirement planning, consumers are increasingly choosing robo-advisors, such as WealthFront and Betterment, over human advisors.
It’s clear that software is already effective for making many complex financial decisions that we once never dreamed possible. And software’s financial decision making competence is advancing at a much faster rate than human’s financial decision making competence.
So whether under the guise of “algorithimic trading,” “robo-advisors” or whatever it may be called, the trend of software / algorithms / narrow artificial intelligence being used to give financial advice and make financial decisions will only grow.
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