Editorial: A Need for Optionality in Insurance

optionality in insurance
The Zebra founders Joshua Dziabiak (COO) and Adam Lyons (President & Chairman), with new CEO Keith Melnick (center).

Today The Zebra announced that we closed a record-breaking $40 million Series B funding round, led by Accel Partners. As if that weren’t enough excitement, The Zebra is thrilled to introduce Keith Melnick, former President of KAYAK, as CEO of The Zebra.

These milestones are a testament to the work we have done, creating the leading insurance comparison marketplace, and a very literal investment in what we will do in creating an insurance search engine and solution for consumers to understand, purchase, and manage their insurance all in one place.

A key step to this vision is bringing choices to consumers.

In order to get a good price on a product, people will spend tons of time researching, comparing, and shopping among the available options. You wouldn’t buy a flight without checking fares from different airlines, would you? Yet not everyone chooses to shop around when purchasing insurance – despite the fact that insurance is the fourth greatest annual expense for Americans. Why? It’s complicated, the options are constantly changing, and consumers don’t know just how many choices they actually have.

What You’re Buying: Coverage Options

There are few products as complicated as insurance. Taking just car insurance as an example, it’s not as simple as purchasing a policy. There are different types of coverage, some required and some not depending on the state you live in or whether you’re financing your vehicle, for example.

Consumers’ options also vary based on the many rating factors insurance companies use to determine the risk of the individual being insured (these include where you live, what car you drive, your driving record, even your credit score in some states).

And this is all to say nothing of other features or add-ons insurance companies offer. Some people seek insurance companies with high claims satisfaction ratings, some want 24/7 roadside assistance, and others want to be able to bundle with home or renters insurance.

Needless to say, the multitude of variables creates a massive range of options (which isn’t a bad thing).

But let’s take a moment to remember just how critical insurance is – how it’s a financial safeguard for you in times of crisis, accidents, or circumstances beyond your control. If you get in a car crash and cause injury to another driver, your liability coverage protects you. If your car gets destroyed by a weather disaster like the recent hurricanes which caused devastation in Texas and Florida, your comprehensive coverage will have your back. It’s incredibly important to know how to find and purchase the right coverage for your needs.

Who’s Selling It: Insurance Company Options

You might live under a rock if you don’t know the huge car insurance brands that shell out big bucks on advertising – think the Gecko, Flo, and Mayhem. But there are hundreds of auto insurance companies to choose from, and all are not created equal. Insurance companies want to find customers who fit into their preferred risk profiles, establishing more balance and consistency in their underwriting and claims payout so they can focus on improving operations, innovating, and better supporting customers.

And consumers have certain expectations for the coverage, service, and pricing they seek from insurance companies, but are often driven to the aforementioned big brands – simply because they don’t know where else to look.

Both insurance companies and consumers need a way of facilitating better matches between them.

How You Get It (and Use it)

The Zebra recently ran a study among 1,000 U.S. consumers of how they prefer to shop for different types of products.  (Subscribe to see the full results when we publish them soon.)  

A key takeaway reveals the broad variance in how consumers prefer to shop for an insurance policy. For example, some people prefer to speak on the phone with a licensed insurance agent, others would prefer to handle the experience entirely online, and still many still prefer to work with an agent in person.

There is significantly more variation among consumer preferences for purchasing insurance than for purchasing products like cell phones, hotel rooms, or flights. And these preferences don’t just vary among age groups or regions or income levels. They vary by individual.

Are We Stuck?

So if there are tons of different policies an individual can buy and hundreds of insurance companies to buy from, how do consumers narrow their search? If there is no single way the 250 million U.S. drivers prefer to buy insurance, how do insurance companies reach their target consumers? How do we bring all options together in single solution?

optionality in insurance

InsurTech: We’re on the Right Track

Enter insurance tech, or “InsurTech,” a movement helping to solve these problems and offer consumers more options by using big data, increasingly sophisticated underwriting models, and other innovations.

For example, pay-per-mile insurance models like Metromile’s or Progressive’s Snapshot let low-mileage drivers save on their premiums. Root Insurance rewards good drivers whose speed, braking, and other behaviors are monitored to measure their risk. Peer-to-peer models like Lemonade’s place members into peer groups to pool risk among themselves and incentivize low-risk behavior in order to donate to charities with premiums not used for claims and expenses.

Cool, right? Still, one drawback to these innovations is that not all consumers know about them – whether they are able to use them or whether they are the right solutions for their needs.

The Zebra’s Vision: A True Search Engine & Marketplace for Managing Insurance

The Zebra aims to be the marketplace which brings together all options – including innovative new solutions – to let consumers truly choose among everything.

To be successful, to stick around, to keep changing the insurance industry, we have to be able to serve the needs of each consumer and help them find insurance in a way that works for them. We know those preferences and behaviors are changing and will continue to change, but we don’t know when or how fast. So we offer solutions to help consumers wherever they are in the process, and at whatever level of understanding they have.

The Zebra is independent and unbiased, so consumers know they are not being steered toward insurance companies, coverage, or other options that aren’t right for them. We believe in empowering consumers to understand insurance and enabling them to pursue the process in their own preferred way.

TheZebra.com lets consumers compare real quotes from more than 200 insurance companies instantly, filtering for the custom features that are most important to them. Consumers can opt to purchase the policy by speaking to an agent or entirely online in a seamless start-to-finish experience. The Zebra also operates an independent agency, where licensed insurance agents discuss consumers’ unique coverage needs and purchase the right policies from the companies that best suit their needs.

The Zebra’s team of licensed insurance agents and experts have created more than 1,000 educational resources to inform consumers, including articles here on Quoted, the State of Auto Insurance Report, personalized support on Ask an Agent, and confusing industry terms explained In Plain English.

And now, with this round of funding and expertise from CEO Keith Melnick, who created a powerful travel search engine in KAYAK, The Zebra has added muscle to truly take our products and plans to the next level, bringing insurance options together in a true insurance search engine and marketplace.

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Adam Lyons is the President and Chairman of The Zebra, which he founded in 2012 to simplify insurance shopping. Despite having dropped out of high school at age 15, Adam studied Risk Management & Insurance at the Fox School of Business at Temple University. He worked at Lloyd’s of London in Excess & Surplus Lines commercial insurance as an underwriter at All Risks LTD., one of the nation’s largest wholesalers.Adam has been a keynote speaker at countless insurance conferences, spoke on a featured panel with investor Mark Cuban during the 2017 South by Southwest Interactive Festival, and was named to the 2017 Forbes 30 Under 30 list and the 2015 Inc. 30 Under 30 list.