Last September, per-mile car insurer disclosed $191.5 million in new funds raised dating back to 2014 and the acquisition of Mosaic Insurance, giving the company to ability to re-think its claims experience.
Here’s a brief recap of some of Metromile‘s partnerships and news since its launch in 2013.
This week, we had the chance to catch up with Metromile CEO Dan Preston to hear his perspectives on how the company’s strategy has evolved over time as well has his thoughts on the future of the OBD-II port for Metromile, partnering with comparison engines, and more. While Metromile is still in just seven states today, it has also made some strategic decisions such as ending its per-mile coverage for Uber drivers. Preston will be speaking at our 2nd Future of Fintech Conference on June 27.
The full Q&A is below.
On Metromile’s focus areas today
The big focus for us, probably half the company, is focused on delivering that kind of claims experience. Today, for many but not the majority of our customers, we have a process where you get into an accident, your claims is effectively instantly paid based on your first submission of that. Over time, we’re improving that process so that the majority of our claims will be handled effectively instantly. Claims, we view, is a core focus for us over the following year or two.
As the company evolves, our core strategy has been how we invent new ways to manage risk for our customers. Certainly, auto insurance is a big opportunity, and while I think self-driving cars are super interesting, there is a pretty significant need for many years following to build a great insurance product and experience to develop that trust and relationship with a large number of customers that will allow us to place that same product invention on top of new areas. So we’re starting to think about how that starts to expand over time. Certainly not over the next year or two given we’re in seven states today and looking very much to expand, but we certainly have interest in starting to evolve that part.
On moving from an MGA to acquiring a carrier
National General served as a great partner for us to be able to act as a startup and get our feet under us. We had at the time a $14M-backed startup venture four years ago. There was no way we’d be able to hold risk or go through the process of acquiring a carrier and getting all that approved with regulators. We needed a good partner that had the infrastructure to support the compliance side, the claims.
We worked closely with them to get all that put together. As the company matured, what we identified was this sort’ve disjointed claims experience. And that really was the focus of that transition was there’s two very different organizations and when a customer calls in for the first time and signs up for a policy, they get a certain experience with us, and it was a different one when you file a claim. So for us to deliver that seamless experience, we needed to move that in-house.
It’s exceptionally hard to ask a different organization to follow new processes that you are re-inventing and trying to be agile with. As we put in all these new products and claims, we’re taking on some risk and doing that. It’s somewhat unreasonable for us to ask a partner to have to do that too.
On the future of gathering data from the OBD-II port for Metromile
I generally view that how you access data is largely unimportant, it’s about finding a creative way to do that. The reason why per-mile insurance didn’t exist until five or six years ago is because there was no way to access that data. The device was created and that enabled the whole thing. So to the extent we have other ways of capturing that data, we can offer a far more seamless experience if we can just hit a button and turn on Metromile for instance. I’d be very excited to offer that over time and I do think that will happen in the near-term.
The main challenge is the replacement rate of cars, but certainly if you extend time, you would expect that a lot of these products will happen directly with the car rather than through an external device. It’s something we’re working on.
On joining comparison sites CoverHound and Compare.com
From our point of view, it’s about getting the name of Metromile out there. We view it as our product is directly compared with effectively any insurance product out there. And if customers who are low mileage drivers want to see our product, we’re going to be the lowest rate in most cases so we can compare well on those comparison sites. And as the customer comes in and gets the experience and sees what we have to offer beyond the price, what we’ve seen is a doubling of the investment in terms of an onset of direct channels with referrals and people telling their friends.
On its strategic international backers – Intact and CPIC
We met Intact and CPIC as we were looking at acquiring a carrier and going through our fundraise process. There’s two sides to this especially with Intact. We were about to undergo this pretty momentous change of building out a carrier. Intact has this amazing infrastructure themselves and they have the experience of doing this before and they were able to help us think through a lot of the challenges we were going to face in making that transition. So they were instrumental in helping us think about that. They have also done some great work on the claims side and collaborating on that has been an important part of our partnership.
We’re pretty focused in the US right now, but I do think this model works well outside the US and taking either our product or technology beyond the US and, while not in our immediate future, it’s something that we certainly aspire to grow into. So having strong partners overseas that have a global outlook are pretty important.
One of the things we’ve talked about in the past is how our model would work in different geographies. And it’s very unlikely we would build operations outside the US and that the best way to leverage technology is work with a partner. So, TBD but it’s definitely something we’re interested in exploring because I think there are ways to leverage what we’ve built in unique ways beyond offering it to consumers in the US.
On key learnings since entering the insurance industry
1/ It’s an enormously complex industry. It’s hard to undervalue expertise and so finding really good partners and team members who have been at really great insurance companies leveraging that talent is so critical.
2/ Given that insurance is a very capital-intensive business, you need to find really smart partners to help you scale. If you look at our history, you’ll see big insurance companies or underwriters that helped us scale up over time.
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