Inside a refurbished building on the Williamsburg, Brooklyn waterfront, upstairs from the small retailers of holistic products and past the tiny box offices rented by independent designers, the staff at PolicyGenius sprawls out across several units, working with some of the largest insurance companies to refresh the digital insurance buying experience.
The startup, founded by Jennifer Fitzgerald and Francois de Lame, former McKinsey consultants, was an early entrant to what has become an avalanche of technology startups targeting the insurance industry. It will soon outgrow its current startup gigs as it rides the wave of increased investment in insurance technology.
“Two years ago, we were one of the only folks thinking about the space,” Fitzgerald says. “It’s kind of the final frontier in fintech: People have tackled payments and lending and everything else, and insurance is what’s left.”
In her consulting work, Fitzgerald says she discovered that insurance companies were not equipped from a technology or process standpoint to handle digital interaction at a high level.
“We saw the same problems repeat: how to engage digital consumers, how to deal with the fact that the brick-and-mortar agent is changing,” she says. “But most consumers manage their financial lives online, and we think there’s a huge opportunity to reach all consumers.”
Originally, online insurance distribution revolved around the legacy agent, Fitzgerald explains, with the online form being little more than a lead-generation tool. But PolicyGenius wants to be a true online insurance agency, where everything from the data collection, to the recommendation of different policies, to content and information about the industry is handled in the digital realm.
“We think holistically about the services an agent would provide, which is how we think of ourselves differently from other aggregators,” she says, citing Charles Schwab and ETrade as examples from the financial services world.
And the company has attracted some major players: PolicyGenius currently works with life and long-term care insurance, from carriers like MetLife, Prudential, and The Principal. It’s also received funding from the venture capital arms of MassMutual and Transamerica. Insurers want to get better at interacting with digital customers, Fitzgerald says, but there are obstacles.
“The tech situation at life insurance companies in particular is pretty old. Any sort of pilots or integrations take a while to get off the ground,” she explains. “But the industry is receptive. At the end of the day, our interests are aligned in terms of delivering a great customer experience.”
A better customer experience around insurance is all about “streamlining the ask” of the prospect, Fitzgerald elaborates. PolicyGenius integrates with a number of third-party data sources so that customers spend less time filling out forms. In the future, that could revolutionize the industry, she says, but it will take some time.
“Most life insurance sold is underwritten using medical exams; there is a world in a few years where that will be replaced with data,” she says. “But you won’t know performance of those products until five to 10 years down the road, and that’s a big bet for an established company.”
And despite the fact that the medical exam is often cited as a reason why life insurance sales aren’t reaching their full potential, that’s not usually a friction point, based on what PolicyGenius has learned about customers, says Fitzgerald. It’s the waiting after the medical exam that irritates buyers – and better technology integration and data use can fix that as well.
“Customers get why they do it, and at the end of the day, it’s a free health checkup paid for the insurance company,” she says. “But just speeding up the infrastuture built around that process, where every piece of data is re-entered three times, and getting within a week getting a decision was transformative.”
