Comparity is LendingQB’s official partner for home insurance. We’re integrated with LendingQB’s loan origination software to make it easy for lenders to help their clients buy home insurance and keep track of necessary insurance documentation for their closings.
FOR IMMEDIATE RELEASE
|Kevin Curry||Angelo Jones|
Comparity, LendingQB Partner to Provide Industry-First Integration Between Hazard Insurance and Loan Origination Software
Virginia Beach, Va., Feb. 15, 2017 – Comparity, LLC, an insurance technology company whose mission is to simplify insurance shopping, has partnered with Costa Mesa, Calif.-based LendingQB to integrate its home insurance platform directly into LendingQB’s loan origination and loan processing software.
The industry-first integration imports mortgage loan application data directly into Comparity’s home insurance application. Home insurance applications require many of the same inputs as mortgage applications, and home insurance is required in order to close on typical home loans. The integration makes processing home insurance during the mortgage closing process more simple, transparent, and streamlined for both lenders and homebuyers.
“Everything in the mortgage industry is driving toward digital. It seems obvious for hazard insurance to be integrated but business and regulatory constraints have been obstacles,” said Scott Hunter, Managing Partner and Chief Executive Officer at Comparity. “We created a technical solution that enables homebuyers to shop privately with the most carriers using their mortgage application data. This integration also helps lenders track their clients’ hazard insurance requirement, validate estimates, and download evidence of insurance,” he added.
“To be competitive in today’s market, lenders need to remove as much waste from their workflow as possible,” said Tim Nguyen, President of LendingQB. “The partnership with Comparity eliminates hours of wasted time finalizing hazard insurance applications that can be leveraged through the existing data in the LOS.”
LendingQB’s LOS is completely web-based and designed to provide lenders a flexible, innovative workflow. Its open-architecture application protocol interface (API) enables lenders to select the tools, like Comparity, that best help their efficiency. Comparity’s technology and distribution platform is designed to fit specifically with the lender’s workflow and bridges the gap between a digital mortgage and hazard insurance.
Comparity is an insurance technology company whose mission is to simplify insurance shopping so everyone wins. Comparity connects buyers and sellers of personal insurance through an online, side-by-side comparison of multiple policy quotes from multiple companies using a single insurance application. Comparity reaches more insurance carriers than any other company, including carriers no other company can compare. Learn more at https://www.comparityins.com
LendingQB is a provider of Lean Lending solutions. The Lean Lending solution consists of a 100 percent web browser-based, end-to-end loan residential mortgage origination system, best of breed integrations with key industry partners and ‘adoptimization’ services that result in faster cycle times and lower costs per loan. For more information, please call 888.285.3912 or visit www.lendingqb.com.
We reached another important milestone last Friday: Comparity is a licensed insurance producer in all 50 states.
Now our technology can be used by insurance shoppers to compare options and buy insurance from any agency in the country. Our technology gives both buyers and sellers the “shopping cart” and “buy button” they’ve always wanted but could never have until we came along.
Insurance agencies who join our network receive completed insurance applications to quote for free. We receive a fee only for each new policy acquired using our technology. Both independent and exclusive carrier agencies can participate.
We are actively seeking new agencies to join our network in all 50 states, and especially in California, Florida, Georgia, and Oregon.
If you are an insurance agency owner or principal and would like to download our presentation to learn more please click here.
Today we reached a milestone for our company and at the same time we contributed something useful to the world of home buying and home insurance. Today we launched our first API integration with a mortgage technology company and it was not only our first integration, it was the first integration of its kind between the home mortgage and home insurance industries. It will help lenders, borrowers, and insurance carriers alike by streamlining home insurance into the increasingly digital mortgage business. It’s something that lenders have wanted for a long time but was never possible until we came along.
Technically, API integration is quite simple, almost trivial. For technology companies, API integration is expected. You’re not a tech company if you don’t API. But in the mortgage and insurance industries, API integrations are rare. Mortgage and insurance companies are not only decades behind with their technology but layers of regulations, consumer protections, and market forces made any business case for integration between mortgage and home insurance seem untenable.
That’s where we came in. The combination of our technology and business model makes it not only possible to integrate home mortgage with home insurance but profitable for us to do so, and in a way that adds value for everyone in the ecosystem. Lenders get a way to help their clients with hazard insurance that is compliant with lending rules and streamlines their closings. Homebuyers get a way to privately shop and compare the market without any effort. Insurance carriers and their agents get access to desirable customers without any up-front lead fees.
Today we reached a milestone for our company and did something useful for the 5M people who buy homes each year, their lenders, and their insurers. We won’t reach them all right away but we took the first step. That feels good.
It may seem trite, but shopping for insurance is important. I might go as far as saying that shopping for insurance is vital to our economy, for reasons I’ll try to explain here.
First, some background. Right now people truly can’t shop for insurance. Sure, anyone can go online, check out familiar brands, maybe fill out a few quick forms. In the case of auto insurance you might even get back some instant estimates. But this is all just marketing and to truly get even a single accurate quote you must complete a multi-page application with a credit check and motor vehicle report.
In the current market, some lead generator sites attempt to fool insurance shoppers into thinking they are getting multiple quotes to compare, side-by-side. Truly these sites sell shoppers’ contact information to eight different agents who race to be the first to reach you. Whatever information is entered with the lead generator has to be re-entered with each company selling the insurance in order to provide an accurate quote. (We call it a “hard transfer”.) Buyers hate this situation and so do sellers.
Buyers (and sellers) are then left with two choices: 1) go all in with the first company they feel good about and hope it works out, or 2) fill out the same application over and over with multiple carriers. Unfortunately for buyers (and sellers) both options have further consequences.
Option 1 doesn’t always work out. Sometimes carriers will decline to insure properties based on their current risk exposure. It happened to me when my carrier – a company my parents had been with for 30 years – could not insure a new property because it was too close to the shore and the company had suffered too many hurricane losses in the area. It turns out that going with the company your parents have, which is exactly what most people do, isn’t reliable. Even when things do work out there’s no way of knowing you ended up with the right coverage for the best price because you didn’t compare.
Going to an independent agency that represents multiple carriers is one way to mitigate the main consequences of Option 1. But going with independents still leaves out comparing options from captive carriers that are household names, offer bundling discounts, and own > 50% of the market.
It may be obvious why Option 2, filling out the same application over and over, is no good
but there’s more to it. For each application you fill out you will get back a different result, probably as an attachment to an email. Maybe you’ll make a folder on your computer to save all the attachments. When you open them they’ll all look and feel different. Different companies use different terms to mean the same things. There’s no way to easily compare options. Maybe you’ll try to make your own spreadsheet and hope you understand everything. And because you still had to contact multiple companies to get this far, they are all calling and emailing you to sell their product.
You wish you could complete one application, send it off to every insurance company, and get back valid quotes that you can easily compare through a consistent format, all while staying in control of the shopping experience and not giving your contact information to multiple sales people.
Why is this so important? Why is it “vital to the economy”? I think it should be obvious by now why the status quo is terrible and that something should be done. What’s not so obvious is how this affects a very important segment of our economy: home buying.
Every year 5M people buy homes and home insurance is a required product on every home loan. Buying a home is a time when people should shop for insurance. We evaluate every other aspect of a home when applying for a mortgage; appraisal, title, flood elevation, and the like. Why would we not evaluate the home insurance? The only reason is because shopping for home insurance is so difficult.
As mortgage processing gets faster, more automated, and more consumer-driven the need for a fair way to shop for home insurance becomes greater.
The combination of required home insurance and no reasonable way to shop is a recipe for disaster. In addition to potential underwriting issues and lack of basic evaluation, the lack of a way to shop for home insurance creates costly inefficiencies in the best cases and leads to unethical and illegal business practices in the worst cases. As mortgage processing gets faster, more automated, and more consumer-driven the need for a fair way to shop for home insurance becomes greater. How else will we balance market demand with consumer protection?
We’ve already seen what negligence and fraud in the mortgage industry can do to our country’s economy. I don’t think there’s the same potential scale for wrongdoing when it comes to mortgages and home insurance but I do see legal entities forming that undermine consumer choice and trust while attempting to maximize corporate profit. In response new government regulations are written to attempt to counter new behavior. Everything becomes more convoluted and inefficient when it could easily become simpler and more efficient. The solution is clear: provide the insurance market with a fair and reasonable way to shop when none exists today.
So that’s what we’re doing at Comparity. If you’d like to find out more, connect with me on LinkedIn and send me a message.
image courtesy Pixabay
We’re still not sure how peer-to-peer is different from “mutual” but today we learned that one of Lemonade’s differentiators is that they’ll pay unused premiums to charity, instead of keeping it as profit or returning it to members as a dividend. There’s some indication, too that this model could be a fundraising vehicle for groups like your little league, your school’s PTA, your city’s SPCA, a local homeless shelter.
We like that.
We’ve long experimented with a similar affiliate program we call “Compare for a Cause“. (We’ll donate $10-25 to your favorite charity when you refer someone who gets a comparison.) Supporting social safety nets is a core part of our business philosophy. But we also support dividends for mutual insurance members and corporate shareholders. Lemonade’s intention, some may call it a disruption, could be the elimination of unused insurance premium as a source of corporate profit. We’re indifferent. Comparity has no stake in that part of the business. Kudos for Lemonade if they figure it out.
There’s a lot we still don’t know about Lemonade. They were prominently funded a year ago by venture capitalists and have been in stealth mode until now. Because we are also out fundraising our Angel round we get questions about companies like Lemonade from potential investors all the time.
To Comparity, Lemonade is like any carrier. We want them in our model on our comparisons. Insurance is about diversity (by definition) and choice (by necessity). We’re think underwriting defines target customers for carriers and believe that it’s in everyone’s interests to have as many carriers in the market as possible so shoppers can shop. Today that doesn’t happen. Insurance customers can’t shop and compare easily without providing lots of detailed, personal information to multiple companies and dealing with a bunch of solicitors. Meanwhile, insurance carriers are left to use dragnet marketing techniques like mass media ads and buying contact info even though they are searching for highly specific customers. Insurance agents on the front lines sort through then “toss back” 95% of those leads for preventable reasons like not being able to insure.
That’s where Comparity comes in. We’ve created a broker-less marketplace where insurance carriers like Lemonade (and Nationwide, Allstate, Farmers, Traveler’s — over 30 others) can meet their ideal customers without having to pay for the opportunity. It’s the same marketplace where insurance shoppers can apply to and compare multiple insurance companies at once through a single, anonymous application and a simple, side-by-side comparison of quoted policies. We like to say that we’re simplifying insurance shopping so everyone wins.
If you work for Lemonade or are a venture capitalist please drop us a line to learn more.
Image: CC0 Public Domain
One of CB Insights’ recent most shared stories came from the headline “Insurers put financial backing behind insurance-distribution startups”. So that got our attention.
— CB Insights (@CBinsights) August 26, 2016
Distribution is the most crowded sector of #insurtech, by far. Venture Scanner tracks 242 companies in a “Comparison/Marketplace” sector, 29 companies in “P2P”, and 61 companies in “User Acquisition”.
— Florian Graillot (@FGraillot) August 29, 2016
It stands to reason that distribution is the most active venture space. After all, the very nature of insurance requires effective distribution (of risk).
Without effective distribution, risk carriers can take on too much risk in a particular category, such as weather. Here in coastal Virginia some carriers restrict by proximity to tidal water, for example. Good luck getting some of the most prominent carriers to cover anything within a mile of the Atlantic Ocean or Chesapeake Bay.
Distribution sectors as defined by Venture Scanner are just one way of looking at insurance distribution. CB Insights seems to look at the space a little differently. Peer-to-Peer, On-Demand, and Digital Agency are their apparent groupings. Never-mind for a moment that within any of these categories the differences among what the companies actually do are vast. It’s not as if they are all competitors of one another, except, perhaps, for VC dollars.
Given all of the funding and activity flowing into distribution we can’t help but wonder: why isn’t anyone getting it right?
Admittedly, we don’t know most of the 300-odd companies in Venture Scanner’s #insurtech categories but we pay attention to what and who everyone else is talking about. There’s a gaping hole where we fit. As far as we can tell, no one is focused what we think is most important factor in insurance distribution: the shopping experience.
Peer-to-peer, just-in-time coverage, and a better web+mobile strategy may have value but they don’t address distribution at scale and insurance is massive. Practically everyone has property and casualty insurance. Assume a few million friends and family decide insuring one another is a good way to go. Assume a few million want to itemize their property and buy insurance a la carte or only when they need it. Assume all insurance agencies will be successful at going digital (and those who don’t won’t survive). Of these three models, only peer-to-peer helps buyers decide who is best to cover them. Every year in the U.S. five million people buy a home. When people are juggling 50 things associated with a buying and moving into a new home, do they want to consider the existential nature of insurance or do they just want it to be easy to compare options and buy? You can probably guess what we think.
To disrupt insurance distribution at greater than niche scale, a radical, new model for the shopping experience is needed.
Specifically, three things are needed:
- Shopping must be easy for buyers to compare across carriers for their unique risk profile
- Quoting must be free or low-cost for sellers
- The total transaction must be seamless from application through purchase.
Put another way:
- Buyers must be able to fill out one application and get back multiple underwritten quotes they can easily compare
- Sellers must only pay for leads that convert
- There can’t be brokers or “middle men” who collect only part of an application and can’t complete the transaction
To most people we speak with these seem like impossible requirements to meet. Surely some part of the market will reject it, they’ve said. But there’s a good reference model. We think key to effective insurance distribution at scale is match-making. Buyers and sellers want to get to know more about each other before they commit to marriage. Moreover, when buyers and sellers are empowered with better information about one another and have some level of individual control over the commitment, they both make better decisions. Like a dating service, but for insurance.
Go ahead and call us crazy. But think about it:
Insurance carriers (sellers) want to know that each person seeking insurance is, in fact, insurable by the carrier according to the carrier’s underwriting restrictions. I touched on restrictions above with coastal restriction – just one on a long list of what some carriers can’t insure. Every carrier has their own list of restrictions and restrictions change over time. Mass media advertising and billboards are terrible at targeting ideal customers, and worse in the case of insurance because of underwriting restrictions. Lead generators who sell contact information in exchange for estimates are awful, too. Imagine an agent buying a lead that’s been sold 8 times, racing to get the client to fill out their application first, only to discover a loss claims history disqualifies the client. Effective targeting is vital.
An insurance buyer wants to know that they’ve seen all of their best available options and are getting the appropriate coverage for the best price. This is practically impossible in today’s marketplace (without Comparity, that is). There’s no way for a prospective customer to fill out one complete application, not have their information sold a dozen times, and get back multiple underwritten offers that are easy to compare.
What buyers and sellers both need is a simple, efficient, and transparent way to get to know one another through an exchange of basic information. Buyers and sellers also want control over how their information is used in this exchange and control over the buying decision. We think there’s a straightforward way to give both parties what they want in a way that can transform the entire marketplace for the better. Providing buyers and sellers with better, more actionable information about one another will enable smarter policy transactions that will benefit everyone.
Separate but related: Another important factor in risk distribution is the number of risk carriers. Risk is most distributed in a market that supports the most risk carriers. Any trend toward fewer carriers requires an accumulation of risk. Our approach is to level the playing field for everyone and enable smaller, niche carriers to participate more effectively.