5 July 2017 07:00
Martin Bailey and Isabelle Bouchard | Photo : Réjean Meloche
Aurrea Signature has taken a minority stake in Karma Insurance, a start-up company that will sell directly to the online insurance, with the support of a team of consultants to employees.
Karma Insurance wants to change the model of traditional sales and make the online experience more enjoyable for consumers. Its platform currently in development will be launched in beta version on June 29, 2017. This first version will be limited initially to the provision of insurance products individual life. An official launch will take place later in the summer. If the company succeeds, the product offer will be expanded to all individual products.
Karma will be a general agent partner Aurrea signature and will have access to the 17 insurance providers, compliance services and back-office, stated the CEO of Aurrea, Christian Laroche. The partners have indicated that the application for registration of Karma Insurance from thefinancial markets Authority followed its course. Mr. Laroche wants to allow them to be active across Canada, through the permit that holds Aurrea in Ontario and in the Maritimes. It will undertake efforts to obtain permits in Western canada.
The advisers who will act for Karma will be paid for by a formula of salary and bonuses to performance, revealed Mr. Laroche. The property of in-force business will remain in the hands of Karma Insurance, who seeks, above all, councillors interested in service and not the sale. The agreement does not provide for fee-sharing between Aurrea and Karma.
«Karma has the same contract as any other officer, general partner Aurrea, for example Pro Life insurance. Aurrea will receive the surcommission insurers and Karma will receive his entire compensation. Karma will leave Aurrea the one hand to assume among others our services back-office, » said Mr. Laroche, in interview to the Newspaper of insurance.
The advisors of Karma will have their permit, but will not move with the client. Out of the interaction with the advisor, the process will take place entirely online, through the proposal and electronic signature. The CEO of Aurrea has indicated that it will put its network of independent advisors in the service of Karma Insurance, in the case where the firm is dedicated to the direct sale would need to transmit more complex cases.
Passage in the Journal of the insurance company, Christian Laroche, the two partners in the majority, and the founders of Karma Insurance, Isabelle Bouchard and Martin Bailey, recounted their journey. Partners in life, they want to take advantage of the digital shift undertaken insurers in recent years. They also want to redefine how to sell insurance online.
They’re going to bet on a team of consultants employed to bring the customers to purchase the insurance, and not to make the sale. The two thirty-somethings are neophytes in insurance. Ms. Bouchard has a bachelor’s degree in law, and Mr. Bailey a bachelor’s degree in software engineering.
It is, however, one of the things that has the most beloved Christian Laroche of these two young entrepreneurs. «Their strength is precisely that they are not from the insurance industry. They have not been contaminated. They were followed by the steps that we would not have followed, for example by doing a number of interviews with milléniaux and Y, and testing of their platform in Internet cafes. They have understood how these young people wanted to get insurance. «
During this market study, the couple has been able to identify the expectations of young people towards the process fluid and transparent, easy-to-use. «This is what has emerged from our many interviews during which we asked what people thought of the model of sales of existing insurance «, said Mr Bailey. It is their entrepreneurial spirit that has led the two entrepreneurs to create Karma Insurance, before you even know the area. «We lived nine years in Vancouver, where we have launched start-ups of technology in pharmaceutical, in artificial intelligence and computer vision,» he said. We are then interested to fintechs, and have found the transition to digital started in the insurance industry, » says Mr. Bailey.
Disruptive of tradition
And why re-invent the model that the insurers are just beginning to put them online ? The insurers are taking a digital shift, say the associated Karma Insurance, but tend to repeat the traditional high-pressure sales.
However, to reach the young requires precisely to eliminate the selling pressure out of the equation, insists Isabelle Bouchard. «We want to give the lie to the adage that insurance is a product that sells, not a product you buy, she says. I was certain that you could buy life insurance via the Internet, even before you get in touch with Mr. Laroche. But I did not like the traditional model of the digital offer, where you ask for a name and a telephone number, and in which, optionally, a counselor sits down at your table. I saw the lead generators, which make the digital offering is similar to that of traditional underwriting, so that we want to go further, » she said.
A way to go further depending on Karma : emulate the model of the banks to prevent these institutions have been buying up all the young market savvy of the Internet. «The platform will provide users with online tools to be familiar with the insurance products, analytical tools needs, comparing rates and characteristics of products, calculators and the support of the advisor, to bring the user up to the purchase of its police force,» has listed Ms. Bouchard.
Karma does not rule out the possibility of selling products that the insurers have designed to be traded without the intervention of a counsellor. «We have the technology to do it,» said Ms. Bouchard. Like everyone else, we are waiting for the tabling of legislation that will shape this practice. «
Ms. Bouchard and Mr. Bailey insist however on the importance of the role of the counselor in the chain of distribution. Their market study shows that the Y and the milléniaux want to look for online information on insurance coverage without having pressure. However, these researchers need a consultant to answer their questions and find the product they need. Ms. Bouchard noted that the adviser will be always accessible during the process, by chat, email or telephone.
The broker always involved
«According to a survey from LIMRA, 80 % of milléniaux start doing their research on the Internet before you buy life insurance, and there is no offer to accommodate this customer, recalled for his part, Mr. Bailey. Ultimately, the broker will always be involved to ensure the compliance of the transaction and validate it. This will not be a system that is not supervised, where you can buy anything. «