Breaking Away from the Pack: Building products people actually want

Photo credit: Graham Watson

Glance at the website of any insurance broker and you’ll undoubtedly find some variation of the following sentences: “You can trust us because we have been in business since 1938. We promise to get you the right coverage that gives you peace of mind for the right price.”

Com·mod·i·ty — Noun: A basic good or service that is interchangeable with other commodities of that same type

Insurance distribution is a commodity: every conventional insurance broker provides the same basic value proposition. Assuming that you use a broker that is minimally competent, it makes no difference where you buy insurance. Customers instinctively know this, so they naturally tend to purchase insurance from brokers they know, like a neighbour, in-law, or family friend.

The most successful insurance brokers are those that excel at cultivating these personal relationships. This is problematic because a business that is dependant on personal relationships is difficult to scale. Brokers are people after all, most do not have truly exceptional networking skills. As a result, the size of most brokerages will plateau within a few years. That’s why the competitive landscape is animated by tens of thousands of independent and small sized firms — resource constrained and without the ability or incentives to provide the modern, online purchasing experience that we have grown accustomed to.

How do you de-commodify Insurance Distribution?

The de-commodification of insurance distribution relies on the ability of new entrants, like, to buck the industry’s tunnel vision on customer acquisition (though traditional marketing, SEO, content marketing & Google Adwords) and instead build products that people actually want.

Have you heard of an insurance company that will come to your house and put winter tires on your car while it’s parked in the driveway? What about an insurance company that can recommend smart devices, like connected thermostats & smart locks, to help ensure that your home is safe all the while lowering your premium? What about an insurance company that communicates with you anyway you want it to, whether that’s through text message, WhatsApp, Facebook Messenger, Slack, email, telephone or even snail-mail?

In the coming weeks I’ll be outlining our approach to the de-commodification of insurance brokerage. Some of the steps we’re taking are no-brainers, but others delve deeper, addressing issues that speak directly to the needs of people who have grown far more technologically literate than the insurance industry that serves them.


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For details on the logic and research underpinning our business model, download our whitepaper
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