

From kidnapping and bribery to insurance comparison: Leaky - rdl
http://pandodaily.com/2012/12/05/from-kidnapping-and-bribery-to-insurance-comparison-leaky-is-boring-and-thats-okay/

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rogerbinns
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...](http://www.blackchapman.com/medical-legal-
journal/personal-injury-law/insurance-companies-use-colossus-to-assess-
medical-records-and-settle-claims/) and then an explanation of how insidious
it could be (eg taking into likelyhood to sue)
<http://www.millerandzois.com/colossus.html>

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

~~~
kpommerenke
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>.

~~~
rogerbinns
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.

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gwern
> 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.

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sharkweek
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?

~~~
abarringer
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"

~~~
jasontraff
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.

~~~
spuz
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?

~~~
disgruntledphd2
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.

~~~
spuz
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.

~~~
disgruntledphd2
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).

------
ilamont
_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.).

~~~
spuz
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.

------
Mz
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.

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

~~~
Mz
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.

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drivebyacct2
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.)

