➤ A pair of former Esurance executives have launched a new insurtech startup, Noblr, which plans to use real-time driver data to help underwrite policies.
➤ The company's co-founders were a part of Esurance's game-changing rise in the industry in the 2000s.
During their 10 years with Esurance, Jason Foucher and Gary Tolman learned the basics of the insurance business and the patience and discipline it takes to grow an insurance book. "We kind of grew up there," Foucher said.
In the wake of their launch of Noblr Inc., which has links to White Mountains Insurance Group Ltd. and Third Point Reinsurance Ltd., Foucher talked with S&P Global Market Intelligence about the new company's goals and what sets its product apart from other insurtech offerings. The following is an edited transcript of that conversation.
Jason Foucher, co-founder, Noblr Inc.
S&P Global Market Intelligence: You and Gary helped change the way car insurance was marketed and implemented during your time with Esurance. Is that what you’re trying to do with Noblr, or is there another goal here?
Jason Foucher: There's a different goal here. It's more about product differentiation. We're also direct-to-consumer, just like Esurance [Insurance Co.] and Progressive. But here it's more about leveraging the latest technology to create an insurance product that's different from what's out there.
One of those differences is getting the consumer involved with determining their rates through their driving behavior.
That's the nature of our reciprocal exchange model. We think we can attract responsible drivers and use word of mouth to attract like-minded drivers, grow a business and make the roads a safer and friendlier place to be.
Your competitors already tout the discounts they give to safe drivers. What's different about the Noblr model, and how does your idea of "behavior-based pricing in real time" work?
We're essentially leveraging the technology that's already in your pocket. We've created a new insurance product from scratch. We try to make it more fair than what's out there and, at the same time, simple to use.
What we do is basically reward you through real-time discounts. Essentially, as you're driving and making smart driving choices — putting your phone down, not being distracted, keeping your eyes on the road, as well as not driving aggressively — you can really save some money on car insurance. Usually there is a fixed term, but here you can really drag your rate down over time based on the feedback.
You also worked at Metromile Inc. This sounds a lot like the technology the company uses to track drivers' mileage. Did Noblr evolve from that concept?
The technologies are different. Nobody's leveraging the phone, so typically, it's just much, much cheaper to stream data from the phone. It may not be as accurate as other options but it is pretty good at detecting driving trips, whether you're using your phone or not, or when you have hard brakes and acceleration. There are so many sensors on your phone now that it's a really advanced piece of equipment. So we're going to stream that data and make decisions on how to determine what discounts to provide to drivers.
As you've developed the product, what kind of challenges did you have to overcome in getting on track?
Insurtech can go two ways: You can start your own company or you can leverage the paper of a bigger player. So we chose to start our own company, which takes time. You have the paper application you have to fill out, you have to build trust with the [regulator] and you have to get certain costs in place to be able to support the projected growth as a company. That took some time.
The other part is building software and getting the thing ready for the consumer side. So you know, a lot of back and front work needs to happen to really take a complex insurance product and make it simple and easy to use for the consumer.
One common thread between this venture and your time at Esurance is the involvement of White Mountains. Could you talk about that relationship?
It's always been a strong relationship. They were early investors and they helped run Esurance, from a capital and strategic standpoint for 10-plus years before the acquisition [by Allstate]. It's important, I think, from an insurtech standpoint, to get support from savvy insurance investors so that when you're sitting around the boardroom, you get that kind of healthy push in the right direction to keep you focused on insurance profitability.
Unfortunately, I think most actors today are struggling a little bit from that standpoint. Hopefully, we can combat that. And, again, I think that's where the patience and discipline come in. It's easy to grow an insurance product; it's harder to make money.