Other parts of this series:
Jennifer Fitzgerald is the CEO of Policygenius. In this podcast, episode, she explains why the company started in life and disability, why owning the customer experience has been central to their success—and why telling prospects about the insurance they don’t need has been a differentiator.
- Jennifer Fitzgerald and Francois de Lame founded Policygenius to address the fact that insurance product distribution wasn’t keeping up with changing customer preferences and technology.
- Policygenius started in life and disability insurance, and has recently expanded into property and casualty lines.
- The company built its proprietary CRM that provides a 360-degree view of the customer—which allows it to capture all customer touchpoints and deliver an omnichannel experience.
Behind the scenes in insurtech
Season two of the podcast has focused on insurtech—how start-ups are achieving scale, what the industry needs to do to evolve and importantly, how insurtechs and incumbents can learn from each other.
How to build an insurtech, with Jennifer Fitzgerald
In this episode, we’ll peek behind the curtain at Policygenius. CEO Jennifer Fitzgerald explains how she and co-founder Francois de Lame built the product that is Policygenius.
Welcome back to the podcast. I’m Eagranie Yuh and my guest today is Jennifer Fitzgerald.
Jennifer is the CEO and co-founder of Policygenius, the nation’s leading online insurance marketplace. She was also selected Ernst and Young Entrepreneur of the Year New York for 2019; one of Fast Company’s 100 most creative people in business for 2018; and is one of only four women founders in Fintech to raise over $50 million in funding.
Thanks for making the time to speak with me, Jennifer.
Thanks for having me.
Tell me a bit about Policygenius.
Policygenius is an online consumer insurance marketplace. We offer everything from life insurance to homeowners insurance to renters insurance and everything in between. You can come to Policygenius.com, get educated, read content, search for insurance, shop, get real-time quotes and then bind coverage all in one spot.
And what was the problem that lead you to create Policygenius?
The problem that led me and my co-founder to create Policygenius dates back several years when we were consultants at McKinsey. We were helping insurance companies try to figure out where to go for consumer growth. One of the big lightbulb moments was a study that found that the average age of an insurance agent is 59 years old.
Insurance agents are still the primary distribution channel for insurance in the US. If you couple that with the fact that increasingly, most households don’t have an insurance agent relationship, that presented a big problem for insurance companies. Meaning, how do we get our products into the hands of consumers who still very much need them? The way we’ve traditionally distributed these products just isn’t keeping up with changing consumer preferences and changing technology.
Right. The natural answer was a digital product. Can you talk about how the current incarnation of Policygenius came about to serve that need?
Sure. I mean, first, we started with talking to actual consumers. We did a lot of research targeting consumers, asking them about their most recent insurance purchasing experience, where they went to, what happened, what they wished would’ve happened.
So that was one piece of it.
The other piece of it was just taking a step back and looking at how consumers transact across verticals today. There’s Amazon. There’s Expedia. I mean, you name it, there’s a digital self-service marketplace, and there really wasn’t one for insurance.
I recently purchased insurance through a broker, and it was not as easy as buying something online. But one thing that I noticed was this element of advice. I’m not an insurance expert to the degree that a broker is, and so I really valued that relationship. How is Policygenius addressing that part of the piece? It’s a place to buy; what about the advice?
Great question, and that’s been central to our model since the very beginning. Insurance is still very much an advised product. Nobody’s an insurance expert. Nobody wants to be an insurance expert who’s actually not in the industry.
We have advice a few different ways in our company. One is all the content that we create and that we publish to our site and distribute through syndication partners.
The second piece, which is very much part of our business model and makes us unique, is the human aspect. We have a full, licensed and expert operations team behind the scenes that supports our customers. We fully believe in the hybrid digital-human model, and that’s been borne out in how we look at the customer journeys.
Most people want a digital journey. They want to be able to research and get smart and see prices and compare quotes on their own, and from the comfort of their home and on their iPad. But when it comes to the moment of truth—meaning that you’re going to actually pull the trigger and buy a life insurance policy or a homeowners insurance policy—that’s an important decision. You’re either buying a 20-, 30-year contract in the case of life insurance, or you’re buying a contract to protect what’s probably your most valuable financial asset.
Most people actually want validation from an expert advisor before they proceed, and that is how we’ve designed our process. So we’re not lead-gen. We don’t collect your information and sell you to insurance companies. We own that customer relationship end-to-end.
I find it interesting that it’s validation that somebody is looking for in that relationship and maybe not education. Am I understanding correctly?
I mean, there’s all types. There are some consumers who want to be fully educated in a one-on-one human interaction.
What we find, particularly with younger consumers, is they want to get smart and eliminate some of that information asymmetry on their own, right? They want to know the terminology, they want to know the product set, they want a rough sense of what pricing looks like before they talk to a human.
At that point, they’ve more or less sold themselves and made the decision that, “Yes, I need homeowners insurance,” or, “Yes, I need a long-term disability insurance policy but I’d like a quick 10-, 15-minute conversation with an expert to validate that to make sure that I’m thinking about it the right way, and that I’m not making any glaring mistakes when it comes to something that’s a pretty important financial decision.”
I wanted to clarify that you are a broker, so when someone’s contacted by a person, that’s on behalf of Policygenius, and not on behalf of the carrier themselves, is that right?
Correct. That is a Policygenius employee that you’re speaking to.
Okay, so you not only had to build this online marketplace, but you also had to train this army of insurance experts?
Absolutely. We’ve done all of that. Built all the software to allow us to create a digital experience for our core products. And then, we have built and trained the operations team that handles the customer inquiries and can provide that really nice high-touch service when the customer wants it.
Insurance gets this reputation for being fairly opaque about business processes. The insurance value chain is notoriously complicated. There are compliance issues. What has been the most effective in getting your operations team up and running?
Really just being very focused around the playbook for each step of the process. The team who’s speaking directly with customers around pricing, rating, product features—they have to be licensed agents. We have a very specific playbook about how we get those people up to the bar and ready to go.
There is a different team that handles final mile and post-purchase service issues. That’s a different playbook. We’ve focused very specifically on: what are the parts of the customer journey that are going to require some customer support, and let’s be very focused about what that playbook looks like to make sure that that part of the journey lives up to the high-bar experience that we intend to set.
One of the criticisms of how some incumbents have gone to market is that while they present a digital product, there’s friction in the handover to the person. So for instance, if I input my information, and then I go speak to the broker or the agent, they are not able to get access to that. And I have to re-explain myself all over again, which clearly is not optimal. How is Policygenius addressing that challenge and the omni-channel relationship?
We are one company so all of that customer information is with us. The other thing that we’ve done, that’s required several years worth of work, is we’ve built our own software that powers everything that we do with the customer. It’s all one system. So from the time that you enter our site, and you are in, let’s say, quoting experience and looking at the different quotes, if you submit your information online, that goes into our proprietary CRM system that we use to have a 360-degree view of the customer.
And again, that is accessed only by Policygenius employees. So other brick and mortar brokers or even other tech companies will probably use Salesforce or Zendesk or another off-the-shelf CRM software system. We don’t. We have built our own, so that that customer experience is seamless, and so that every customer touchpoint and every person that they talk to is able to see who that customer is and what they’ve done with us.
Interesting. I noticed you posted to Medium and you described your typical consumer as a mass affluent. Was that intentional or was that by virtue of the way that you have designed the product?
Both. By leading with life insurance and having a self-service digital experience, that’s a type of person and consumer that you’ll attract. Traditional financial advisers will often lead with life insurance as well, because somebody who’s in the market for life insurance typically is experiencing a life event that’s pushing them into market such as buying a home, having a child, getting married. And with that, there’s typically a broader set of financial needs behind it. By leading with life insurance and leading with how we went to market, the two of those really produced a way to acquire mass affluent consumers.
Another thing that I noticed about Policygenius is that the whole site is in plain language. There’s fairly detailed financial education there, but it’s all written in very plain language. And notably, when I took the Policygenius Insurance Checkup, it told me what insurance I don’t need. I was wondering if you could talk a little bit about that.
Sure. One of the opportunities that we found when we started the company was the opportunity to be real. It was a territory that nobody had staked out yet in insurance, or even in financial services more broadly. So that means writing in plain English; being very authentic in terms of who you are to the customer; being transparent about products, pricing, products that you don’t need. So that was very central to how we set about designing the service, designing the product. And when we tested it early on, it really resonated with consumers.
I remember testing the first version of the insurance checkup, and users saying, “Wow. Nobody has ever told me what I don’t need before. All I keep getting told is I need this, I need that, and do I need this product, and how about this new credit card offer and this new insurance product, or this new bank account?” We have always looked for the way to be authentic and genuine and build trust with our consumers. And that tone and being transparent was just part of the way that we did that.
I wanted to go back to something you said earlier, where you went to market based on life, and I understand, disability as well. I’m curious why you started in those lines of business.
For a few reasons. One is we saw a big opportunity there for those verticals. There wasn’t a lot of competition when we started the company in those two verticals, especially in the digital spheres. So that was one piece of it.
Two, if you look at the most commonly cited verticals to go after, auto insurance being probably the first, then homeowners insurance. They’re very, very crowded verticals. They’re tough to build a two-sided marketplace, which is what we have built.
Had we started with auto insurance, for example, when we were a small five-person company with less than a million dollars of funding, we would have died on that hill. It’s very crowded with lead generators. Lots of people are going after the auto insurance market so strategically, just did not make sense for us to enter that market.
So that’s why life and DI, and then pet insurance, were our products when we started. Life insurance really took off, and that’s where we’ve largely been focused over the last few years—but have gotten that business to a pretty good point where, now, we feel comfortable expanding horizontally.
I want to come back to that. But before we do, I was wondering about the issue of trust, particularly in the area of life and disability, where you have to hand over some fairly personal information. And at least in the early days when you were just getting started, how did you address that issue of trust and get people to say, “Okay, I’m going to give you this fairly sensitive information”?
Yeah. It’s a lot of small things and big things, right? You have to try to build the signalers of a brand that consumers trust. For example, getting a lot of online reviews. Getting endorsed by personalities, authorities, publications that consumers trust is something that you do in the early days. Being thoughtful about how you ask about those questions and being upfront about your privacy and security policy. There’s no shortcut way to build trust. It’s just a whole lot of little things that you have to get right and be persistent about when asking that information of consumers.
Now, you’ve mentioned your expansion horizontally, and I noticed that Policygenius now offers home and auto products. So can you talk a little bit about that? And is it different, or are you applying your playbooks from before and adapting it for new lines of business?
A little bit of both. We’re largely applying the playbook that we’ve developed and battle-tested for life insurance to home and auto insurance. They’re largely the same consumers. For example, the lessons that we’ve learned in terms of acquisition, operation, customer experience—all of that is getting applied over to home and auto. Plus, all of the software infrastructure that we built, the tech infrastructure that we’ve built, we’re leveraging for home and auto.
But part of it is new, right? It’s a completely different customer journey. There are different pain points. The supplier side of the marketplace is largely different. There are a few carriers that play in both P&C and life, accident and health, but not many. So there are some new things that we’ve had to build and develop as well to expand horizontally.
Policygenius is based in New York, where you are, and is currently an American enterprise. Any plans on moving outside borders?
Not in the immediate term. The US market is so big that we’ve just still got a lot of wood to chop here.
I have lots of questions for our next episode, around culture and talent and scaling at Policygenius. For now, just one more question: what does the insurance industry need to do to thrive?
I think a couple of things. One is, it’s still early days for insurance tech. So I think you’re going to see a lot of additional new companies moving into the sector. I think eventually, what you’re going to see over the next few years is a bit of a shake-out in consolidation. The winning models, the products and the services that find traction are going to be able to scale pretty quickly.
I still think there is a big disconnect in the market between consumers and carriers. We’re one of the companies focused on that disconnect. But at the end of the day, insurance carriers manufacture products that have to get in the hands of potential customers, be that businesses or consumers. Solving for that disconnect is going to be key for the long-term survival of the insurance industry and for all the players in it.
Thanks so much, Jennifer. I’m looking forward to continuing our conversation next time.
Thanks for having me on.
- Advice is key to Policygenius, which uses a hybrid digital-human model. Advice is offered through online content and a full, licensed operations team.
- Policygenius has navigated the complex insurance value chain by having specific playbooks around each step of the process—for example, one for its sales agents and another for post-purchase service.
- The company has gone to market by “being real.” That means writing in plain English, being transparent about products and pricing—and noting which products customers don’t need as part of its Insurance Checkup.
For more guidance on building customer-centric digital products:
- Dig into our research on why insurance customers value integrated, omnichannel and tailored offerings designed to meet their core needs.
- Read this blog post on why service, not innovation, impresses insurance customers.
- Learn about the online opportunity to target small commercial insurance.
In our next episode, Jennifer will share how she and co-founder Francois de Lame scaled Policygenius from a start-up of five people, to more than 200 people. We’ll dig into questions like: How has Policygenius operationalized culture and values? How does it hire the right people? And what decisions have been turning points for the company?
Join us in two weeks for that episode. In the meantime, you can catch up with previous podcast episodes here.
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