From kidnapping and bribery to insurance comparison: Leaky | Hacker News Reader

From kidnapping and bribery to insurance comparison: Leaky

pandodaily.com

39 pointsrdl22 comments

My problem with car insurance is not the price, but what happens when you need to make a claim. Any company can undercut any other on premiums, but you only truly find out what happens when making a claim.

There are attempted frauds, people expecting coverage that they didn't actually pay for, misunderstandings etc which means every insurance provider has a website detailing how they suck and treat people badly. And of course the insurance company doesn't want to pay out more than it should.

Premium price is amongst the last things I consider because of this.

Here is an example site for Farmers Insurance and ultimately what led to me dropping them: http://farmersreallysucks.com/

You'll note they mention software from CSC named Colossus and to stay away from companies using it. Software rules does mean standardization, but also means virtually no case specific leeway. Here is a good explanation of how it works: http://www.blackchapman.com/medical-legal-journal/personal-i... and then an explanation of how insidious it could be (eg taking into likelyhood to sue) http://www.millerandzois.com/colossus.html

I totally agree. Where is the Amazon style user review/rating for insurers?

Yelp already has ratings for individual agents. More useful, however, are the insurance ratings published by J.D. Power, based on consumer surveys: http://www.jdpower.com/consumer-ratings/insurance/index.htm.

But how much of dealing with the claim is up to the agent? One of the claims about companies using Colossus is that it gives the agent no leeway when handling claims. I'd also hate for my experience to be up to the agent - what happens for example if they were away on holiday when an issue happened?

When I moved from the UK to the US it was rather bizarrely up to individual agents discretion as to taking me on. In general everyone quoted you the same rates as a 16 year old who had never driven before, because you had no insured time in the US. But one agent was prepared to take non-US driving experience into account.

> That company, called Leaky, launched nationwide today to help people shop for insurance. Most online price comparison tools for insurance are just lead generation for the various providers, so Leaky provides value with its unbiased comparison, Traff says....The company will monetize by selling insurance itself and also through affiliate fees to insurers. “We can lower customer acquisition costs by 75 percent for an insurance company,” he says.

I see.

I think this is great, and I'm very excited for Traff's project getting some wings -- but I am curious; aren't there already dozens of comparison/affiliate sites like this?

What about Leaky is so revolutionary and worthy of press?

From the article.

"Most online price comparison tools for insurance are just lead generation for the various providers, so Leaky provides value with its unbiased comparison"

This. Mostly.

The idea of comparing insurance isn't new, but I felt that no one had done it well. Generally, either the results are biased because someone is trying to encourage you to pick one company over the other. Or when an agency is able to show you accurate, official prices - they are not able to show it for all of the largest companies, which results in an incomplete comparison.

With Leaky, we've set out to change that by being as impartial and transparent as possible - because we think that people deserve to be able to compare and manage their insurance the way they want to.

Can you explain how other comparison websites try to encourage you to pick one company over another without providing a benefit (i.e. cheaper price or better cover) to the customer?

Also, I understand that most comparison websites will not quote from every insurer and that there are now almost as many comparison websites as there are insurers. How will you be able to attract partnerships from more insurers than anyone else has done so far?

In a previous life, I worked with an online travel agent (you'll note I don't say for).

One of their major income streams was promoting certain providers in order to get more commission, so that if two providers had approximately similar inventory, then the one paying better commission typically gets placed at the top.

I understand how that happens when you're talking to a sales person - it's their job so they want to get the best commission they can.

A comparison website is just an algorithm. The deal at the top is the one with the cheapest quoted price. The price comes directly from the insurer so the comparison website has little control in which results are shown to the user. The only control they might have would be to remove low return insurers from their result set (in which case why partner with them at all?) or more likely present a high return result as a special or premium offer in which case they have to sell that to the customer on the basis of value for money.

Nope, in this case the algorithm was tuned to deliver the highest commission for them. It's a really, really stupid technique, and leads to poor conversion, but that aim of grasping for every bit you can get out of your local maximum is a difficult habit to break (and a worse one to codify in an algorithm).

We have a variety of these websites in the UK, such as gocompare, comparethemarket and moneysupermarket.

All of them list quotes ordered by price, from lowest to highest - and while some companies aren't listed, I have yet to find an unlisted company that offers a better price.

How does your product compare to these?

The whole point of a price comparison site is that it is unbiased. They show you several options and give you the information you need to decide which one to go for. Yes comparison websites act as lead generation but they make sense for both parties. The customer only needs to enter their details into a single place, while the insurers get leads from people who might have otherwise stopped their search after getting their third quote.

What does it mean to display 'unbiased' quotes to customers? I tried to visit Leaky's site but it appears to be down.

There are in fact only a few comparison sites in the U.S., but dozens of lead generation sites where you enter your details and then get calls from agents (often asking for the same details again). These sites are nearly worthless, as they only give you quotes from a few selected companies (usually the companies willing to pay for leads). None of them includes more than 2 or 3 of the top 5 carriers by price and customer satisfaction, based on J.D. Power surveys. That's why I built EZquo (http://ezquo.com). It's a simple website that lets you enter your details only once and get a private link that you can pass to any agent for a quote, saving you hours as well as your sanity.

To most entrepreneurs, it’s a total snooze, which is precisely why his company is positioned for success. The company solves a problem that is, to use a banker word, “unsexy.” It’s one that few people want to tackle: insurance buying.

I am sorry to sound harsh, but statements like this make me question the ability of the author to evaluate companies and their products, as well as the judgement of the Pando editors who gave this version of the article the green light.

The fact that it targets an unsexy market has little bearing on how well it does over the long term. One could even argue that any unsexy market that involves lots of money changing hands will attract lots of entrepreneurs, which could negatively impact the success of this venture (competitive pricing, ability to attract investment, etc.).

I understood this to mean that this is a gap in the market and hence the company has a higher chance of meeting some market demand. I'm not sure if that's how you understood it but I agree that it could have been better editorialised.

pg wrote on this extensively:

http://paulgraham.com/schlep.html

Something that would be truly revolutionary: A site that compared policies. I have at times done some googling for that type of info. It appears to essentially not exist.

What are you looking for? Comparing policies in terms of what?

I am not looking for anything (in terms of "buying a policy for me"). I paid insurance claims for five years (and have an industry certification: "Certified life and health insurance specialist") and I do freelance writing at times and I sometimes try to help people by answering questions they asked. For various reasons, when I have gone looking for info online, I typically cannot find anything substantive and meaningful.

Given the recent NYTimes piece regarding dropouts, it may be worth noting that the two additional cofounders are dropouts as well.

(I have the strange fortune of knowing both of them as well as the subject of the NYT piece.)

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