CoverHound wants to help a million people find insurance over the next year via its quote comparison engine
A Q&A with CoverHound founder and CEO Basil Enan. The San Francisco–based company was founded in May, 2010, and launched to the public earlier this month. Investors include Blumberg Capital.
SUB: Please describe what CoverHound is, and the value proposition you bring to the auto insurance business.
Enan: CoverHound is an online insurance rate comparison service that allows shoppers to quickly compare multiple quotes from top carriers and to easily buy the right policy for them via our team of licensed insurance experts. Consumers love us because we’re bringing an unprecedented amount of transparency to an industry that has been slow to shift online. Insurance companies love us because we offer the most efficient customer acquisition channel out there.
SUB: Who are your target users?
Enan: Anyone looking to save money on auto or home insurance. Whether you’re a new driver or someone looking to insure multiple cars and your home—we work with lots of top carriers and can find a great policy for everyone.
SUB: Who do you consider to be your competition?
Enan: Our biggest competition is people doing nothing. Shopping for insurance has always been close to the top of most people’s list of least favorite things to do so too many people just stay with their current carrier even if they’re not happy with the price they’re paying or the service they’re getting. CoverHound changes all of that and lets people shop in just a few minutes.
As far as other companies—Answer Financial is the only one that comes to mind. They’re a very large independent agency which was recently acquired by Allstate.
SUB: What differentiates CoverHound from the competition?
Enan: We’re similar to Answer Financial in that we’re also a licensed independent agency and we sell policies on behalf of carriers like Progressive, Travelers, and Safeco. One big limitation of their model is that many of the biggest insurance companies like State Farm and Allstate—#1 and #2 in the country—don’t work with independent agencies. We want all carriers to be represented on our platform since that’s best for our consumers—so we’re building some cool tools to make it easy for our shoppers to get quotes from local State Farm and Allstate agents and most other top carriers.
SUB: When was the company founded and what were the first steps you took in establishing it?
Enan: I founded the company in early May, 2010. A couple weeks later I was on stage at a DukeGEN Angel Pitch event with just some slides. Aaron Patzer, the founder of Mint.com, who was one of the judges laid into me because I’m not technical and didn’t have a technical co-founder. He was right. So I quickly found one and we started building. We then joined Angelpad’s 2nd class in February, 2011, which was an awesome experience.
SUB: What was the inspiration behind the idea for CoverHound? Was there an ‘aha’ moment, or was the idea more gradual in developing?
Enan: CoverHound was born out of frustration with the then solutions that were available to people looking to shop for insurance online. It was more of a ‘there has to be a better way’ moment. So we started building what we thought should exist but the service constantly evolves as we learn from users what they want.
SUB: What have the most significant obstacles been so far to building the company?
Enan: I constantly get the question ‘Why hasn’t this existed before?’ The answer is long and complicated, but a big part of it is that insurance companies are understandably cautious and are slow to adapt to new technologies. It’s taken a lot of in-person meetings to get everyone in the industry on board and excited about working with a startup.
SUB: You just had your official public launch. Why was this a particularly good time to launch?
Enan: It’s a really a case of the stars aligning for us. We launched at Finovate because Dodd-Frank and other legislation are squeezing financial institutions on fees and they’re looking to make up a lot of that by selling insurance—we’ve got a turn-key that’s perfect for the biggest of banks to the smallest credit unions. At the same time, insurance rates are generally going up around the country and people are increasingly turning to the web to shop.
CoverHound is at the intersection of some pretty big trends and it’s getting a little nuts around here—in a good way.
SUB: Do you plan to raise outside funding in the near future?
Enan: We’ve been very lean the past couple years—having just raised a small seed round—but we’re ready to go big now that we’re live and will likely raise a significant Series A later this summer or in the Fall.
SUB: What are your goals for CoverHound over the next year or so?
Enan: It’s all about helping people save money on the insurance they need. Our goal in the next 12 months? Help a million people find insurance. That’s a lot of people but with over 30 million people shopping each year, it’s just the tip of the iceberg.
CoverHound – www.coverhound.com