In December 2016, Massachusetts-based Clearsurance, the insurance rating and review platform launched. Please see Agency Checklists’ article of December 13, 2016, “Massachusetts-based Insurance Rating & Review Platform Launches.”
As the platform picks up speed and launches a new $10,000 contest to increase awareness, Agency Checklists caught up with Clearsurance Co-Founder and CEO Michael Crowe to find out more about this “first-of-its kind” crowdsourced platform, and what it can offer those consumers, carriers, agents, and brokers who use it.
First thing first, can you tell our readers about Clearsurance?
Clearsurance is a crowd-sourced rating and review platform for consumers. Right now it’s focused on property and casualty personal lines: auto, home, and renter’s insurance. We started the company in August of last year, and launched the first version of the web platform on December 6, 2016. We’re still at a fairly early stage company.
You said you’re a co-founder. Who’s the other founder, or founders?
Todd Kozikowski is the other founder. Todd is an astrophysicist by background and has been in the technology field for 20 years with a track record of success.
How did you two come together and put together this idea of Clearsurance?
After I sold my last business in 2010 to Brown & Brown Insurance, I stayed on for a few years. However, I wanted to start another entrepreneurial venture and had been thinking about the white space that existed for consumers in the insurance industry relative to having a good sense of an insurance company’s reputation. I noticed there was no crowd-sourced platform for reviews and ratings (the voice of the customer) as exists for most other industries today.
I come from an insurance industry background, Owen, and knew that I would need a technology partner if I wanted to put the idea or the vision into action, that’s when a mutual friend introduced me and Todd. We hit it off, and both saw an opportunity to improve transparency in the insurance industry – it became a shared vision.
Clearsurance already has $2 million in funding, correct? Can you tell us where your funding came from or is it confidential?
I am the principal investor and other investors come from my professional network including insurance executives from a national employee benefits consulting firm. A handful of those folks were also shareholders or investors in my prior business.
Going back, if we could, I think our readers would be very interested in hearing about that prior entrepreneurial experience with startups in the insurance industry, including the one you sold to Brown & Brown.
The name of the company was Crowe Paradis. Crowe Paradis became a holding company of three insurance services firms. We had Crowe Paradis Services Corporation, which was a Medicare and healthcare compliance and analytics firm, acquired by Verisk Analytics in 2010, and today goes by the name ISO Claims Partners. We sold the holding company in two separate transactions at the end of 2010.
We also had an advocacy company—specifically a disability and Medicare advocacy business—that worked directly with disability insurance companies to advocate for employees who were transitioning out of the workplace due to a disability. That company was acquired by Brown & Brown September 1, 2010.
So how does the site operate?
It is very straightforward. Our aim is for consumers to visit our site when they’re researching their options for insurance rates or to change their insurance company. We want them to hear from other customers like them – the voice of the consumer and use this information to make an informed decision.
We’re also cultivating a community through our learning center via blogs and articles, where we’re trying to advocate on behalf of the consumer. We’re selecting topics or things they may not know about to educate consumers to have some self-efficacy when speaking to their insurance company, and to get a better grasp on their insurance life cycle, if you will.
What are the benefits that Clearsurance brings to the marketplace for consumers?
First, it is a neutral, unbiased platform. It’s the voice of the consumer, and it’s crowd-sourced. There are some other ratings you can access in the marketplace such as Consumer Reports or J.D. Power, their tools don’t allow consumers to dig down and look at what people are actually saying about their individual experiences. Those are aggregated surveys that don’t reflect the voice of the consumer like Clearsurance does. What we are trying to do is to carve out a space as a neutral and trusted source.
At this point in time, consumers do not have a resource they can easily use to learn about the reputations of insurance companies. As you know, the reason any of us buy insurance in the first place is so it is there when we need it. It’s great if we get a good price on our insurance coverage, but what good is cheap insurance if the reputation of the insurance company with your policy is lousy?
I learned from my own experience. When I bought my first homeowner’s policy approximately twelve years ago when I was living in Newburyport, I knew from my personal and professional industry experience that I would buy my homeowner’s policy from Chubb. I knew that it would be more expensive, but everyone in the industry was aware that Chubb had a great reputation for processing and honoring claims.
Ninety days after buying that policy our basement flooded out—unfortunately, we had just finished it six weeks prior. I had a flood exclusion in that policy, and they could’ve denied the claim, but when the adjuster came over he noticed that I had a sump pump in the basement. The adjuster deemed the loss a mechanical failure, which meant that the loss was covered. That situation validated that great reputation when I had a loss, they were there when I needed them.
That experience always stuck with me. Had I not had a background in the insurance industry, I may very well have chosen a cheaper insurance plan with a less reputable company. It was a recognition that the typical insurance consumer does not have inside knowledge when it comes to an insurance company’s reputation. It seemed to be a major gap in the marketplace.
When you factor in the recent rise and adoption of crowd-sourced rating and review platforms, and the fact that millennials, especially will read a review before making a purchase (78% of the time), we couldn’t ignore the gaps in the marketplace and decided to fill that void.
Once we’ve established that neutral, trusted, position in the marketplace, and we’ve gained consumers’ trust, we would like to provide consumers with a platform to put their insurance business out to bid, not acting as an agent or a broker, but as a neutral marketplace. We envision insurance companies will be able to compete not just on price but also their reputation for service.
Couple of questions going back. One, you talked about the survey such as J.D. Power’s as providing aggregated surveys. What did you mean by that?
They will aggregate ratings based on the surveys that they conduct, but you’re not able to actually see what consumers are saying. They only show scores and ratings. I’m not being critical of J.D. Power; they’re a great company. They do important work, but consumers have come to expect more than just a list of aggregated rankings.
I think they [consumers] want to see what other consumers like them are actually saying about their experience with their insurance company. That capability did not exist in the marketplace until we launched. People accept that there is a lot of power in the wisdom of the crowd, and I think crowd-sourced platforms are here to stay. They have proven their viability in many other industries, and we don’t think insurance will be any different.
Operationally, what are you talking about when you use the word crowd-source in relation to Clearsurance?
Crowd-source refers to the actual content of the review itself. If you go to J.D. Power or Consumer Reports you’re not reading the actual consumer reviews. You’re not seeing what people are writing and sharing about their experiences. It’s the shared experience component, in a community setting that makes us different.
In relation to Clearsurance, what are the particular crowd-sourcing resources you use and how do you receive reviews?
To start, it is a combination of organic reviews, such as people who find us through search engine marketing. We are also running outbound surveys to generate greater awareness.
We just kicked off a new marketing campaign on Monday. We are running a contest and will reward 10 people who share their insurance experiences with us via reviews/ratings. We will determine the winners based on the reviews that are deemed the most helpful to the Clearsurance community. Ten lucky winners will receive $1,000 each over the next 90 days.
How are you going to reach out to these consumers? What’s the advertising medium?
We have mainly been experimenting with Facebook and other social media platforms and that has yielded a fair amount of interest and traffic so far. This strategy has led to a few thousand followers already and we expect this group to grow organically from the seeds that have been planted.
You mentioned during our interview that approximately 78% of the millennials will read a review before buying. Where is that statistic from?
This great visual shows by generation the percentage of people that rely on online reviews before making a purchase. (See Below)
Have you received reviews of agents and brokers as well as insurance carriers?
As part of our initial survey to the market asking people to share their experiences with insurance companies, about 40% of the surveys came back with people reviewing and rating their agent or broker. I guess it is not a huge surprise that many consumers don’t differentiate between their insurance company and their agent/broker, because they actually view their agent or broker as their insurance company. That, however, was a revelation for us. That is why we are strategically evaluating how to integrate agents and brokers into the platform, because we believe they have a valuable role to play.
Are there other things you have learned from putting together the platform?
It’s interesting, as we talk to insurance companies, there seems to be this race to the bottom on price. Everybody’s competing on price. A lot of consumers who shop online are price sensitive – that seems to be the major consideration for them.
There are, however, insurance companies out there that have invested heavily in technology and service, and our belief is there is a significant segment of the consumer population that would pay a higher price to have the assurance of a company with a strong reputation.
We envision that insurance companies will have many more opportunities to directly connect and generate better long-term loyalty with customers based on the ability to interact with them through social media and in a crowd-sourced community like Clearsurance.
Do you have a revenue model in place yet? If so, what is it and how much does it cost?
Our revenue model is subscription-based. So, [it makes sense for those] insurance companies who want to more meaningfully engage with reviewers who come and write a review, and provide a rating of an insurance company.
If insurers want the ability to reply to customers, if they want to receive analytics on customers that are reviewing their company, and if they want the ability to benchmark how they’re doing versus their competitors, that’s all included in the subscription model we are launching in the next 90 days.
As for pricing, subscription rates will vary based upon the size of the company’s annual premium volume. Our entire business model is predicated on transparency, so we must remain open and transparent. We have no problem doing that.
In terms of the subscription, what does that include for insurer?
We give subscribed carriers the ability to enhance their profile, edit their profile, and to determine which company content they want to publish on the site.
We allow them to go out to the site now, claim their profile, contribute and publish additional company information including specific product lines they offer.
Carriers may comment on reviews. For example, if they see a review where a user has a question, comment, concern, the administrator for that insurance company can respond directly on that review, and interact with that user. Those are some of the capabilities that exist right now.
Are there different subscription levels?
At present, if a company claims its profile we are offering a subscription for a period of six months at no cost, to demonstrate the value of our platform. Our goal is to get insurance companies involved, integrated, and engaged.
How many insurance companies have signed up for Clearsurance so far?
We have eight insurance companies that have claimed their profiles without any outbound sales or marketing.
Where are they from? All over the country or just in the New England region?
They are from every region.
How did they find out about you?
Generally, an insurance company president or CEO saw an article about Clearsurance. Some mentioned your blog and the article you did on us when we launched. Some saw the article in Coverager and then some others cited other press we received and said, “I think we should check this out.”[pullquote]We take this seriously. We don’t want to have content on our site where people are just blasting their insurance company, using inappropriate language or naming a specific adjuster, etc. [/pullquote]
Overall, I think most insurance company executives understand this is coming. They know there will be some kind of crowd-sourced review and rating platform specific to the insurance industry. I think there is a high level of curiosity, and maybe some apprehension, as to what format it may come in.
One of the early strategic decisions we made was to elevate and improve the service standards for policyholders, and consumers, by inviting insurance carriers into the process. Now, inviting them into the process doesn’t mean they can manipulate their rating or their score, but if they have an engagement strategy [this platform] should benefit them from the standpoint of how consumers review and rate them over the long-term.
How many reviews do you have in total on the site?
We are just under 10,000, and again we just launched our outbound marketing campaign on Monday.
We have not yet allocated a whole lot of resources to generating awareness and acquiring users. We’ve been development focused and that is about to change starting this week, and so we are expecting there will be a significant uptick in the traffic of visitors and the number of reviews we receive beginning shortly.
What, if anything, do you do to ensure that you don’t get bogus or fake reviews?
It is a great question and usually the first one we receive from an insurance company, understandably.
We have a process in place where reviews are screened by the Clearsurance team. By way of background, 40% of the reviews that have come to us so far we have not published, for one reason or another. The most frequent reason is it violates our terms of use. If you go on our site and you look at our terms of use it spells out the rules of engagement for a reviewer.
We take this seriously. We don’t want to have content on our site where people are just blasting their insurance company, using inappropriate language or naming a specific adjuster, etc. We put a lot of thought and effort into the process, one that’s scalable, so that when we’re receiving 10,000 reviews a day, we can maintain control of quality.
An insurer can challenge any review based on violating the terms of use, or for any other reason, and if they do we will consider it. We have had a few challenges come through, and I think we’ve taken down 60% of those reviews that were challenged, and we left the other 40% up, because we didn’t think they violated terms of use.
Where do you see Clearsurance a year from now? What’s your hope to achieve this year?
We hope that from a content and review standpoint we have north of 100,000 reviews on the platform. Today we have 232 insurance companies rated and we would like to see that number grow to 350 to 400. We would like to see 60 insurance companies on the platform as subscribers, actively engaging with their policyholders.
What has been the most surprising thing you’ve learned since launching the company? What is something that you hadn’t expected?
I would go back to the volume of reviews that came back, especially for the insurance brokers or agents. I think we expected or understood that it is a confusing marketplace from the standpoint of the consumer, but I don’t think we appreciated the volume or the percentage of people that confused their insurance company with their agent or broker.
How has the reception been so far with carriers you have dealt with or that have subscribed to the site? Have you been out to meet companies face-to-face or has it been via social media and email?
About half of the insurance companies met with us in person and we did telephonic interviews with the others. We’ve talked to a handful of CEOs of top 50 property and casualty insurance companies. We expected to encounter reticence, or skepticism—I guess would be a better characterization. What we received for feedback was, “We figured this was coming at some point, but we weren’t really quite sure in what form or from where it might come.”
I think the anonymity of it, and the fact that there wasn’t really much of a filter for publishing the reviews. The reviews went pretty much live in real time. I think that’s the greatest concern. Is there going to be a fair and balanced approach to how the reviews and the content are published? I think that’s what we’re trying to address.
Do you have plans to attend conferences this year? How can interested insurance companies get in touch with you?
Yes, we plan to attend a few this year. We just attended OnRamp in Chicago last week, and are also sponsoring the upcoming Insurtech Boston III meet-up in June. We also plan to attend these additional the other national conferences later this year.
- Insurtech Boston III–June 15, 2017
- The Future of Fintech (CB Insights) – June 26-28, 2017
- Super Regional P/C Conference (Insurance Journal) – July 16-17, 2017
As for getting in touch, any interested carrier can contact our Chief Marketing Officer, Stacy Varney at Stacy.varney@clearsurance.com.
Any final thoughts?
Social media can level the playing field for smaller, more regional insurance carriers especially if 80% of people are going on to read a review before they make a purchase. That is something that is worth remembering.
