There are two ways to get cheaper car insurance; one is to check online comparison sites, such as Go Compare, Meerkats or Moneysupermarket etc. The other is to play a poker game with your existing insurer and a cheaper rival you may be able to track down online, after around 9 hours browsing on your smartphone. It can be immensely time-consuming and many people simply give up.
But there is a third way; honcho. You upload your data and then the insurers and brokers come searching for your cash – sounds interesting, and it might just disrupt the existing system within car insurance. In fact, reverse price comparison site Honcho poses a threat to aggregators with its digital, time-saving approach aimed at appealing to millennials, says GlobalData, a leading data and analytics company.
Honcho is due to launch in Q2 2019 with an app that allows customers to enter the terms they want for a car insurance policy, then receive offers from insurers that they can accept or reject. Each offer comes with a Honcho score, which indicates how close it is to the desired terms.
Ben Carey-Evans, UK General Insurance Analyst at GlobalData, comments: “Reducing the time it takes to receive a quote has been a key trend across all insurance channels recently, and this is very much a part of that. Customers scan their driving licence, enter a few details including the terms they would like and then offers are messaged to them. This means that unlike comparison sites, customers have done all the work once they have set up their profile and can wait for insurers to chase them.”
GlobalData’s 2018 General Insurance Consumer Survey (which consisted of 4,000 respondents in the UK) found that 38% of people purchase motor insurance via a price comparison site, an increase of over 10 percentage points since 2017.
Carey-Evans explains: “This shows a significant and growing proportion of consumers use aggregators, which would be Honcho’s target audience. However, the survey also found that only 1.5% bought motor insurance via an app. This figure was higher for both pet and travel, which suggests consumers are hesitant to purchase such important and costly insurance via an app – a behavior Honcho will need to change if it is to succeed.
“Whether customers will receive a better deal – or if insurers will just ensure their price does not drop below what they are prepared to offer on comparison sites – remains to be seen. But the concept potentially offers a more convenient way to purchase insurance online. While Honcho may not have the financial backing to concern the big aggregators, its emergence could see the rise of other start-ups with their own adaptations on comparison sites start to change the shape of that channel.”