We’re often told that social media has given the average consumer a louder voice and a bigger platform – and one insurance start-up is leveraging that exact notion. For Bought By Many (BBM), the concept is simple: there’s power in numbers.
The business, founded in 2012 by CEO Steven Mendel, has created a network of some 360,000 members, all with various niche insurance requirements. Through social media, members become part of groups where they can communicate and, importantly, band together to get a better deal on their insurance.
Insurance Business caught up with Mendel to find out about the company’s unique model, which aims to go where mainstream insurers haven’t.
Insurance Business: How does Bought By Many’s model work?
Steve Mendel: We use a combination of search and social media to create communities of individuals who have similar but niche insurance needs. So that could be pet insurance for Labrador owners, travel insurance for diabetics, or personal accident insurance for commuting cyclists. Our agenda is to help the individuals in these groups get access to a better insurance arrangement than they could do elsewhere – better might be cheaper, more appropriate cover, or a more joined up user experience and journey, but better is hopefully all of these things put together.
Insurance Business: Do you see BBM as an alternative to comparison sites?
Steve Mendel: Most of what we do won’t be found on comparison sites, and most of what comparison sites do won’t be found on BBM. Typically, what I say to people is, if you’re a mainstream motorist or homeowner then go to a comparison site – you will get a cheaper offer than we’ll be able to get anywhere close to. However, if you have a modified car, or points on your licence, or you’re an older or younger driver, then a price comparison site wouldn’t be the best place for you to get cover, because there’s something unusual about you.
Price comparison sites work incredibly well for the mainstream, it’s as soon as you deviate from being in what we refer to as ‘the short head’, and you end up being in ‘the long tail’, then price comparison sites work significantly less well. And that’s where we have something to offer.
Insurance Business: How has social media given your customers a voice?
Steve Mendel: Last summer, we messaged 100,000 pet owners asking for their thoughts on the ideal pet coverage, and amazingly we got 40,000 responses. The single most popular complaint we heard about the existing pet insurance offering was that the premium increased dramatically year-on-year, even if customers hadn’t made a claim.
So, we listened to that, we confirmed that it was a widespread problem, and we created a policy that we called Fixed For Life – where if you buy the policy before your pet has their second birthday, we guarantee that the premium does not increase over the lifetime of the pet.
Insurance Business: How does what you do benefit insurers too?
Steve Mendel: We’re bringing insurers a better-quality insurance book. Our book of business converts at a better rate, it has higher average premium, lower claims and renews more. What’s not to like about it?
I hope that others in the industry eventually do the same thing we are doing – listen to, respond to, and act on consumer feedback. Because consumers really know this space – the industry has forced them to have to know it. I just don’t expect it to happen.
I think people like the fact that we engage, we listen to what they have to say, and we respond, regardless of what that is. Whether it’s about product design, pricing, or just where a dog owner goes to find a kennel for their dog, we’ll engage with them. That’s just different.
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