January 10th, 2012
This article first appeared on Business Insider
Silicon Valley startups often conjure up images of ping pong tables frequented by scruffy developers in black jeans and Marxian t-shirts. Insurance companies are perceived to be much less hip, staffed by folks with side parts behind big wooden desks inside industrially-lit offices. But a recent trend has seen the proliferation of startups in Silicon Valley starting to shake up the insurance world.
We scoured the landscape and found the five most interesting new companies in the space, and highlighted why each is so promising.
Cake Health. This startup brings a bit of transparency to consumer health insurance plans. At a time when much of the cost and management of health insurance benefits are getting transferred from employers to individuals, Cake Health can remind you how and when to use the free services on your plan (such as an eye exam or a dental cleaning), help you understand surprise invoices, and even give tips how to negotiate a bill down after receiving it. “Our goal at Cake Health is to provide smarter choices that lead to better health decisions, not avoidance,” says founder Rebecca Woodcock.
CoverHound is shooting to become the Kayak.com of insurance. In a landscape littered with crumby sites, CoverHound presents a clean, safe experience for insurance shoppers. They’ve just opened up an agency in Southern California and will now sell policies directly to consumers. “Until now, the internet has failed to give users a positive, transparent experience when shopping for insurance. We provide instant and actionable rates from major carriers, so they can pick the best policy for themselves,” says Basil Enan founder and CEO.
Crimson Informatics is also bringing a disruptive technology to the auto insurance market. The company's hardware and software gather data on driver behavior, giving insurance carriers more granular metrics on which to base quotes. Insurance rates will no longer be wedded to old binaries like gender and education, and can instead be based on actual behavior behind the wheel. CEO Steve McKay says "Usage based insurance represents a big leap forward. Crimson is a leader in analyzing driving data to identify and quantify trends and risks to the insurer, and by giving drivers feedback, it’s possible for them to change risky behaviors and reduce accidents.”
Stik. While not focused solely on insurance, San Francisco-based Stik is helping people find service providers recommended by their friends. Stik allows you to search your friends' Facebook connections for highly-rated providers and sort them based on location, reviews, and keywords. They are focused on insurance, mortgage, and real estate, with more verticals on the way soon. "We are bringing old-fashioned word of mouth into the Facebook era," says Stik co-founder Nathan Labenz.
Wisemuv.net helps insurers reach existing customers at key times in their lifecycle using an educational, fun digital way. They provide a fast conversion process for agents to bundle additional policies and prevent carrier churn. "Our data shows customer satisfaction increased by 37.4% over baseline, while increasing estimated longevity by over 29 months at one of our Fortune 500 clients,” says Founder and CEO Chirag Pancholi. Wisemuv is banking that automating the agent-customer relationship can also bring tremendous predictive data benefits.
Insurance can’t change too much: it will always represent protection for your family and its possessions. But these new companies are democratizing the way insurance is dispensed, providing carriers with precise insights that will create fairer rates -- while giving customers more freedom to choose the best policies.