Insurance

Embedded insurance business plots independent agent pilot

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“I guess my true feeling is, I believe independent agents provide a great customer experience, but lack the technology to actually do the hard part, which is getting the rate in front of the customer.”

Polly, which rebranded from DealerPolicy in early 2022 in a bid to “better engage consumer audiences”, works with car dealerships to offer auto insurance at point of sale. It launched a real estate home platform earlier in the first half of this year and snapped up New York independent agency Brinckerhoff & Neuville Insurance Group in May.

Polly has plans to add up to 25 local agents “in other states” in the coming year, the company said in August.

Plans for the independent broker launch currently consist of a pilot in 2023 with a “handful” of sub-producers, according to Mongeon, involving “embedded tools”.

The business’s primary focus will remain on bundled auto insurance at point of sale, Mongeon said.

Founded in 2012, Polly, described as an insurtech, launched as DealerPolicy seven years ago.

It has backing from Goldman Sachs, the lead investor in its 2021 $110 million series C funding round, while an August tie up with Assurant gave it a 3,000-strong dealer reach.

The embedded insurance market could account for $722 billion of gross written premium by 2030, according to a 2021 InsTech London report.

Embedded insurance

Embedded insurance is “becoming commonplace, and it’s something that the consumer is more and more ready for”, Mongeon said.

Recent research by Polly found that 73% of consumers wanted to purchase insurance when buying their car at a dealership, up on “50% five years ago”, Mongeon said.

Up to 36% of global homeowners, landlords, and renters could switch to embedded insurance sources based on where they might wish to obtain cover “in the future”, a report by business Cover Genius has said.  An overwhelming majority, or 98%, of short-term rental hosts said they wanted booking sites to offer home or landlord cover in the embedded insurance business’s survey.

The consumer is becoming more “programmed” to accept insurance at point of sale, according to Mongeon. Getting embedded insurance right requires “specific industry knowledge”, he said, and this has proven to be a “complicated equation”.

“When you talk about successful embedded insurance over the past 10 years, the ones that stand out to me are things like insuring your television, insuring your furniture, insuring your trip – I would call them ancillary to the product,” Mongeon said.

“When you’re talking about … products like homeowners’, like auto, like business owners’, there’s just far more complexity.”

“Adjacent” vs embedded

Embedded insurance products “cannot be jammed down somebody’s throat”, according to Mongeon. and not all embedded insurance is necessarily created equal.

“There’s a misnomer, that you can just put insurance anywhere and people will buy it; that’s a brand impression and nobody buys in certain spots,” he said.

Some insurance offerings are less embedded, more “adjacent”, according to the founder.

“Think of Disney World – embedded insurance is like ‘exiting through the gift shop’ when you leave the amusement park; to get to the parking lot you must pass through the gift shop and see all the wonderful products,” he said.

“You don’t need to buy, but when you see the quality products, you probably will.”

Adjacent insurance, on the other hand, is “like having the gift shop located next to the exit with a clerk dressed like Mickey Mouse waving you in,” he said.

“You might go into the gift shop because you see the value, but you might just walk by because you don’t want to take the detour.”

To crack the auto dealer market, Polly took a “crawl before you walk … before you run .. before you sprint” approach, Mongeon said, and it intends to continue with this as it builds out home.

“We’re not just going out and blasting it out there,” he said.

“We’re getting it right, setting our foundation and then we’re going to grow it – we’re going to grow responsibly.”

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