Its panel will include 10-15 brokers, insurers and MGAs
Honcho has announced that it will move into beta testing next month.
It hopes to launch in Q2 this year within the car insurance market and plans to extend its proposition to home and travel insurance thereafter.
The insurtech is in the last stages of “testing and optimising” its integration launch panel consisting of 10-15 brokers, insurers and MGAs who will bid for customers.
Its chief executive and co-founder, Gavin Sewell, said that once this is completed the insurtech will finally launch.
It follows a series of funding rounds and two senior appointments last year.
Reinventing insurance distribution
Sewell told Insurance Times that the insurtech aims to “reinvent how the insurance industry as a whole gets their product in front of consumers.”
He explained that 70% of mainstream personal lines insurance today is distributed via aggregators - a model which has been around for the last 10-15 years.
But Sewell said this puts off entrepreneurs from attempting to disrupt the distribution space. This is why he said Honcho stands out, by tackling distribution rather than product.
Up against the likes of ComparetheMarket, GoCompare and Confused.com, Sewell said: “You’ve got to have very deep pockets as a start-up to step into that arena and make some impact.”
He said it’s a huge barrier to entry.
Research consultancy, Corke Wallis revealed last year in November through its research that 57% of respondents thought that comparison sites were making too much money as well as two thirds (62%) being concerned by how much advertising spend was hiking premium costs.
Honcho is a reverse-auction market place for car insurance, the chief executive described it as a “reverse e-bay for insurance products.”
He explained that Honcho has turned the traditional auction marketplace idea on its head.
“Our tagline is: making insurers chase you. It’s a reverse-auction marketplace and what that means is the sellers not the buyers compete against each other to drive a price down to win the buyer,” he said.
And with a target audience of 17 to 35-year-olds this “consumer-centric type of brand that fights for your business” is a message that Sewell says works well with its consumers.
Honcho targets these customers via social media. It partnered with Manchester-based global social-marketing firm Social Chain in September last year to manage its social media ahead of its launch.
Social Chain works with firms such as Amazon, which last year was in talks with insurers about an insurance comparison site.
When asked why this particular group of consumers, Sewell said: “This is the least well served group of people by insurers, they are a demographic that is keen to get a deal, that likes a brand that stands up for them and who are very active on social media channels.”
Honcho charges insurers £1 to bid for custom based on the consumers specific needs, it said that this generates a more “closely tailored list of insurers” in comparison to a price comparison website where anyone can bid.
It then gives each quote a “Honcho rating” telling the consumer how closely matched each one is to their needs.
Using this method the insurtech is able to provide a cheaper distribution channel for insurers and a better service for customers.
He said: ”Being able to draw on experience and domain knowledge from the likes of Marmalade, Brightside Insurance and CDL has been invaluable in preparing for launch and we’re very grateful to all of our partners for their continued support and belief in our vision.”
Honcho is the first reverse-auction marketplace to become an associate member of BIBA and a member of Insurtech UK.
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