Austin Capital Bank takes inspiration from the fintech book and offers integrated insurance.
This is unusual: chartered banks and insurance companies in the United States rarely, if ever, sell each other’s products. But with the help of a fintech partner, the bank is experimenting with ways to link the two services.
There are several benefits for financial institutions that offer insurance comparison tools. They can help provide a more holistic financial services experience for their customers, accrue non-interest income in the form of shared sales commissions, and consolidate customer data or signals about their life stages and needs. Built-in insurance is also convenient for customers who don’t want to spend hours browsing quotes or performing calculations.
“Shopping for insurance is tough,” said Erik Beguin, CEO of Austin Capital Bank, which has $423 million in assets and is based in Austin, Texas. “It takes time. Consumers don’t want to know everything about insurance. They just want to know, am I covered and am I getting a good deal?”
Auto insurance is a recurring need. It is mandatory in all states except New Hampshire and Virginia. The average monthly cost is $139.50, according to the latest data available Data that Bankrate.com pulled, but that rate also varies widely; the monthly cost on Bankrate.com drops to $102 for USAA, for example, but rises to $189 for The Hartford. A 2021 investigation of Consumer Reports found that some insurers vary their rates based on a person’s level of education or occupation.
Trellis is an insuretech in Salem, New Hampshire that allows consumers to share their insurance information with other apps or websites. In December, it updated Savvy, its platform that helps consumers compare car insurance plans, to let people buy car insurance and cancel old plans on the same portal. The company works with fintechs like Albert and Acorns, as well as Austin Capital Bank.
Austin Capital extends Savvy to all of its customers Strong credit program, a credit enhancement product that includes an installment loan and a federally insured savings account. Credit Strong’s online portal includes a sticker advertising the opportunity to save money on car insurance.
Beguin said the combination of Credit Strong and buying auto insurance makes sense. Lower auto insurance payments can help Credit Strong users save more, and a rising credit score can positively influence their auto insurance rates.
When users click on this car insurance tile, they are prompted to give Trellis their car insurance username and password. Trellis authenticates with the insurer’s server, analyzes its policy, and passes the information to Savvy, which compares the client’s policy against hundreds of options, including plans from top insurers such as Progressive, Allstate, and USAA. It will then ask the user through an online form to fill in any gaps, such as other types of insurance they have or their occupations, so that they can locate the appropriate discounts. Customers can then compare their current coverage to other options side-by-side, either in the partner app or on Savvy’s co-branded website, from average monthly cost to bodily injury liability limits.
If customers prefer not to hand over their insurance credentials, they can still explore rates without a side-by-side comparison to their plans.
“I think of the insurance market as a bit like an online dating app or chaperoned matchmaking,” said Daniel Demetri, founder and CEO of Trellis.
He researched how his company’s banking partners can use Trellis insurance data to cross-sell to their customers. “We’re starting to talk about how banks take insurance data and recommend financial services products,” he said. “A customer who drives a lot of miles may be a good candidate for a gas cash back credit card. Or if the bank sees [the customer is] owner and wants to bundle his insurance, he can bring it back to the mortgage business and refinance the mortgage. There is a deep connection between the two professions. »
There is also non-interest income available to banks. As a licensed insurance agency, Savvy collects commissions and shares a portion with its financial institutions.
According to David Montes, director of financial services strategy at KPMG, Challenger and non-banks are testing the waters more than traditional banks to see if customers are interested in comparing insurance rates in their banking apps and sites.
In these budding partnerships between insurers and challenger banks, customers are typically redirected to insurance company websites to enter their information and obtain quotes.
“Ideally, you want customers to come to you for all of their financial service needs, whether you can provide them or not,” Montes said. “It’s like brand transcendence. If your client has a lot of experience buying auto insurance with that other company you partnered with, they bring it back to the bank that initiated the quote process.