The reverse auction marketplace also has plans to focus on partnerships this year 

Historically, a fully digital journey for a multi-car insurance policy product has not been possible on an aggregator platform.

A multi-car insurance policy is a singular insurance policy with one insurer that includes multiple cars registered to the same address - it is suitable for anyone that has more than one car in their household.

Gavin Sewell_Honcho_portrait 2

Gavin Sewell, Honcho 

Gavin Sewell, Honcho’s co-founder and chief executive tells Insurance Times that “the challenge with multi-car is that the plumbing doesn’t exist” between software houses, aggregators and insurance providers to support multi-car propositions.

Currently, multi-car insurance is a direct-to-consumer proposition that customers can only obtain by visiting individual insurer’s websites, such as LV= or Admiral, for multiple quotes. But Sewell hopes to change this.

He continues: “We are keen to work on making that exist, such that we can run a reverse auction in the same way that we do for car and van insurance.

”In the absence of that being instantly available, we decided to partner with Admiral, one of the biggest providers of multi-car [insurance], to put our toe into the water and see how we can engage our customers.”

Sewell believes that by better understanding Admiral’s customer base for multi-car insurance through this partnership, this will help Honcho develop an aggregated multi-car auction product.

Nearly three-quarters (70%) of Honcho’s users have more than one car in their household.

Honcho has also revealed another major partnership this week.

It has joined forces with automotive trade digital solutions platform SilverBullet - this will see the insurance distribution marketplace offer car dealers cover by connecting the two businesses’ respective platforms.

Insurtech Honcho is a reverse auction marketplace that has brought electronic trading to the distribution of insurance.

Longer-term play

Sewell says that multi-car insurance is something that Honcho always wanted to venture into.

“It’s never not been on the list - it’s one of the longer-term plays. Motorcycle, caravan and motorhome insurance we still want to do in the same way we do car and van [insurance],” he adds.

In terms of plans for the multi-car proposition, Honcho is working with various software houses and other providers to build bespoke integration between them and Honcho. This is so it can have multiple providers for a multi-car auction place.

“What we have done with Admiral is part of a set of technologies we have built to provide to our customers an alternative ancillary product. We are an insurance distribution platform, that’s our core purpose – we help customers buy the right product,” he says.

Alongside this, in the context of small businesses that use vans, Honcho has built what Sewell refers to as a third-party marketplace, which features an array of propositions that may be of use to both car or van drivers at these businesses.

This work has allowed Honcho to gather information on its customers. In turn, this enables the firm to offer other convenient or discounted products to “streamline car ownership life at the right time in an intelligent way”.

He continues: “We have built a whole bunch of third-party marketplace integrations now.

”We did a big partnership with a business called MotorEasy – [it offers] warranties, MOTs and the like. We are currently building a curated set of providers in micro-SME - they are going to [be] doing things like tool insurance, cover to defend your license.

”The technology that we used to build that is the same technology that we used to integrate Admiral’s multi-car proposition in a tactical way.”

He says Honcho is now becoming more than just an insurance marketplace - it is also becoming a car care and micro business car marketplace.

Partnership focus

For 2021, Honcho will continue to concentrate on motor insurance, but its primary focus is on partnerships.

Sewell says: “The way we bring customers to the platform is through partnerships. Through Covid-19, a lot of motor [insurance] sales have moved online - that means there’s a real opportunity now to cross-sell to the customer an insurance product at the point of sale.

”Likewise in financial services, particularly open banking [for example], financial wellness apps have a real insight onto customer data.”

Meanwhile, referring to embedded insurance, Sewell says Honcho can provide access to an ancillary insurance product into the point-of-sale of a motor product.

No claims bonus 

When asked about claims on a multi-car insurance policy, Sewell says: “The way they work behind the scenes is like an aggregation of several single car insurance products together with a payment schedule that is aligned and discounted.

”Each of the cars in the policy can have its own no claims bonus attached to it. The more [cars] you add to the portfolio, the more [the insurer] will discount you.”

If a car is added after the policy had already begun, the policyholder would only pay for the remaining time left on that policy, meaning that all vehicles would have the same policy end date or renewal.

Therefore, Sewell deems “convenience and value” as the main benefits for the customer on multi-car policies as there is only one insurer and the customer does not pay a finder’s, marketing or price comparison website fee.