Insurance Archives

Oscar Ties Health Insurance Premiums to Fitness Tracker

By Jim Bruene on December 10, 2014 3:47 PM | Comments

imageAs we speculate about the usefulness of wearables in payments and money management, an insurance startup has already launched a direct tie-in. Buzzy health insurance startup Oscar is paying customers $1 per day, up to $240 annually, when they hit their step- goal tracked on a Fitbit-like tracker from Misfit.

imageOscar has attracted $150 million in venture capital and is looking to bring modern ecommerce thinking to the massive health insurance market. The company is looking to be on the forefront of insurance tech trends, such as mobile help from physicians, easy access to records, digital communications, and transparent costs (see app here).image

How it works
Customers who buy health insurance through Oscar (available in NJ/NY only, but coming to California and Texas in 2015), are given a free Misfit step-tracker (retail value = $50, currently discounted 50%). The tracker syncs to Oscar's mobile app (see inset) and credits customers $1 each day a step-goal is achieved. Goals start at a relatively easy 2,000 to 3,000 per day and ratchet up to the 8,000 to 10,000 per day recommended by fitness experts.

The bonuses are paid in Amazon gift certificates in increments of $20. The Amazon credit is likely bought at a discount to par value, reducing costs to Oscar (more details here).

Significance for FIs
Oscar can pay out $200 per year because it's selling a big-ticket item, health insurance. And it stands to benefit from healthier customers who use less medical care. Unless you are in the health insurance business, you can't copy this dollar for dollar. The important thing is making a game out of healthy habits by keeping score and delivering tangible rewards (previous post).


2015 Digital Banking Strategic Planning (Part 1)

By Jim Bruene on July 31, 2014 5:12 PM | Comments

imageI was on a call today with the digital strategy committee of a large U.S. bank. It was clear from their line of questioning that they are grappling with how to prioritize among the many major opportunities on the digital side.

I won't list any of the specific topics here, but you could guess most of them (though one would surprise you I think). But the conversation got me thinking about what I'd recommend for next year if I was working in a bank, credit union or consumer fintech company.

In semi-prioritized fashion, here are my first three recommendations for 2015. More will follow.


1. Insurance

How are you going to replace NSF fee income once the CFPB gets around to capping it? (Timing hint: There's a big election in 27 months.) One place to look: Insurance. It's one of the last frontiers for retail banks, especially in the United States. FinovateSpring 2014 alum Insuritas (demo here) says it can launch your very own insurance store within 90 days. So if you move fast enough, you could have this running by end of year.


2. Lifetime transaction archives

I believe digital services will increase bank loyalty two or three-fold. So instead of accounts turning over every 7 years or so, it will be 15 or 20 years for digital-first households. Why? Once banks come to their senses and start archiving all your transactions like Google does for email, it will be much more of a pain to move.


3. Subscription fees

Back to the Gmail example. How much could Google charge me now that I have 100,000 messages archived there? $100/year easy. Probably more. Banks should be thinking the same way. Get #2 done, then charge $4.95/mo for a Peace of Mind package that includes lifetime archives, mobile document/receipt capture, priority customer service, and so on.  


To be continued...........


Winning Checking/Deposits from Established Small Businesses

By Jim Bruene on July 24, 2014 4:17 PM | Comments

imageI was asked recently what it would take for me to move my business deposit relationship. My immediate answer: "There is nothing you could do to get me to move."

We have changed banks only once in our 20-year history, moving to Washington Mutual (now Chase) in 2007 in order to get a better line of credit (which ironically, was never granted, as WaMu was about to go into a death spiral).

We've been happy with Chase for the most part, and now have so many services and payees connected to it, that I can't imagine going through the headache of changing. Even if another bank or CU offered a fee-free account that matched Chase feature for feature, it's just not worth the considerable investment in time and energy to switch.  

But a few minutes later I changed my mind. Yes, there is one thing that would make me move my entire business account. And it's so basic that it seems ridiculous that I'd even have to ask for it.

It's the one thing that Chase, or any bank that I know of, isn't currently delivering to small business owners:

Guaranteed safety of our funds against all fraud/theft

Chase has state-of-the-art security as far as I can tell (e.g., two-factor authentication for all the risky moves). And we've never had a problem. However, every time I read about some nonprofit or small business having their account drained after a successful key-logging attack, I get that queasy feeling.

And I'm not even asking for the fraud guarantee to be free. I'd be more than willing to pay for it. How about $25/month for the first $100,000 covered, then $10 to $15 per $100,000 thereafter? That should be enough to make it a decent profit center for the bank and I could sleep better (note 1). A win-win.


1. Two years ago, I was encouraged by the new offering from EFTGuard (see post). They were offering coverage of $100,000 per account up to $500,000 total per customer. Insured customers were required to use fraud-monitoring software from Trusteer, Iron Key or Webroot. The price was $25/mo to the end-user with $10 of that pocketed by the bank distribution partner. But I haven't run across any banks currently offering it.


Fintech Funding Bubble: April Fool's Day Edition

By Jim Bruene on April 2, 2014 10:31 AM | Comments

Photo credit: pedrosek

To prove that last week's post where 10 fintech fundings were announced in a single day, I submit for evidence yesterday's April Fool's Day activity. 
Seems as if companies might want to avoid announcing new fundings on April 1, but that sometimes inauspicious date didn't faze the pace yesterday as seven fintech players revealed total equity investments of $33.5 million. Adding to that figure is $22.5 mil in debt, for a total of $56 million in new capital. 
  • $22 million to BIMA Mobile to expand its mobile micro-insurance services in developing markets. The company says it already has 7 million customers. 
  • $20 mil in post-IPO debt to Identive Group to further its identity-management platform (NASDAQ: INVE)
  • $4 mil to Citizen.VC in advance of its April launch of an AngelList-like service for funding startups (link to temporary launch page)
  • $4 mil to OpenFin to expand its financial trading platform 
  • $2.5 mil Series A for WealthForge to build out its securities-issuing platform, currently used by Realty Mogul among others
  • $2.5 million in debt to to expand its digital identity network
  • $1 mil seed-round to PayStand, a Santa Cruz-based digital POS system that accepts credit cards and Bitcoin (of course)
Again, I'm not saying this is a bubble, but it certainly is a LOT of activity. Then again, if you count insurance (not including health), the financial sector is 8.4% of U.S. GDP in 2011, up from 4% in the 1970s. And it's ripe for improvement in many, many areas. 

Categories: Fundings, Insurance

Why I Want My Auto Insurance Company to Track My Every Move

By Jim Bruene on August 7, 2013 6:56 PM | Comments

imageOur family has been lucky. Extraordinarily lucky. Eighty-plus years of mostly city driving, combined across four drivers, and not a single auto insurance claim (note 1). That means we’ve paid more than $100,000 (2013 dollars) in premiums for nothing, so far (note 2).

Actually, that’s not at all fair to the insurance providers. We’ve paid $100k for the peace of mind and potential financial help had we needed it (not to mention staying on the right side of the law). And it's been worth it.

That said, I wouldn’t mind paying less for the same peace of mind. And that’s why I love the idea of mileage- and behavioral-based insurance (note 3). I haven’t always been a model driver, but I was the first person in my extended family to regularly wear a seat belt and I’ve grown to be a relatively conservative driver, especially after becoming a parent.

And I’d love to be compensated for that.

That’s why I’m all for the next generation of “smart auto insurance” that connects to your on-board computers to measure:

  • Speed
  • Miles driven per day
  • Time of day driven
  • Acceleration
  • Braking
  • How hard turns are taken
  • Seat belt usage
  • GPS tracking

And eventually, even more difficult concepts such as:

  • Driver distraction
  • Driver impairment

Not only will I qualify for lower premiums (hopefully), the feedback from the tracker will be interesting (e.g,. historical maps of your routes) and could have a significant impact on the quality of your driving (since it will directly impact your rate).  I know there are serious big-brother concerns here, especially in light of the NSA scandals of the past few months. But it can all be opt-in, though eventually, those not opting in will face higher premiums.

Progressive Insurance is an early leader in this area. It's opt-in Snapshot tracking device (inset) has been used by more than one million customers (see screenshot below). Prospective customers can install the device free of charge for 30 days and track their potential savings online. You don't even have to be a Progressive customer to get the free trial. 

Bottom line: Unless regulators get in the way due to privacy concerns, it's inevitable that auto insurance, along with other types of property/casualty, will use behavioral metrics to price the risk. That will be a big change for the industry and will likely provide good openings for new entrants. 


Progressive has 1 million drivers using its plug-in tracker (7 Aug 2013)


Snapshot tracking log (via here)



1. There have been a few altercations with concrete pillars and such, but nothing severe enough to involve the insurance company. 
2. I know that I’ve now completely jinxed this, sorry family, and whomever we collide with.  
3. See previous post on Street Owl's safe driving app and Metro Mile's pay-as-you-go insurance.
4. For more on banks opportunities in insurance, see our full report here (Dec 2011, subscription)

Categories: Game-based, Insurance, Pricing

Bank Opportunity: Online/Mobile Travel Insurance Sales

By Jim Bruene on June 24, 2013 6:04 PM | Comments

imageWhen your core business has been around for hundreds of years, it's harder to find new sources of revenue. One area ripe for expansion at many banks is insurance. Wells Fargo, for example, put more emphasis on the area by separating insurance from investments in its June 8, 2013, homepage remodel. See our full insurance report for more info on the market size and opportunities for banks.

While auto, life, health and home are the biggest in terms of overall premiums, they are also highly competitive with hundreds of thousands of established sales agents in the U.S. alone. But dozens of niche insurance-markets exist that might make it easier to find a foothold.

Take travel insurance.

You've seen these policies pitched when you are checking out at Expedia or other travel sites. While it's tough to compete with the convenience of buying during the travel-booking process, financial institutions still have an advantage that Expedia doesn't: Trust.

I've been using Expedia for 15 years and have booked 100+ trips there with few problems. So I trust them with travel arrangements. But does that trust extend to insuring my travel? Not so much. It's hard to understand exactly what is included/excluded in their insurance upsells. And the one-size-fits-all approach rarely covers what I'm looking for in travel insurance (which is "no questions asked" cancellation). And often I'm exhausted after making complicated travel arrangements and have no energy left to figure out whether their insurance makes sense.

I'd much rather purchase a policy from a trusted source where I can get answers to specific questions, review policies after the fact, and be able to come back year after year for consistent choices. And since I don't have a direct relationship with an insurance carrier (everything is bought through a small broker), I would be very interested in buying from my bank.

imageI'm not sure how many U.S. financial institutions offer travel insurance, but I suspect it's a small number. But there is one major player with a comprehensive travel insurance offering, BB&T (see screenshots below).

Getting a quote is easy. You simply tell the bank how many travelers you have, their age, travel date and cost. Within seconds, three options are presented (screenshot #1) covering basic trip interruption to one that covers medical evacuation and much more (screenshot #2, note 2). It even allows you to upgrade to "cancel for any reason" for a reasonable additional fee ($63 per person for my hypothetical $3,000 per person trip).

Actually buying the insurance requires a few more fields to be completed (see screenshot #3). But at that point, I already know that it's worth my while and am not put off by additional data entry. And if I was already logged in, these fields should mostly be prefilled.

Bottom line: With a captive audience of authenticated online and mobile users, banks and credit unions could be the biggest providers of travel insurance. And with the added advantage of seeing travel-reservation charges appearing on debit and credit cards, you can cross-sell the service while the trip-reservation process is still fresh in the customers' mind. 


1. BB&T produces three options for travelers (24 June 2013)
1. Live Chat option in lower right
2. Total cost shown for two travelers going on a $3,000 trip that begins 60 days from now



2. Detailed coverage of BB&T Deluxe Protection Plan


3. Complete application for each traveler


4. BB&T is one of a few financial institutions to include "insurance" as a primary navigation item


1. See our full Online Banking Report on "Banks in Insurance" here (Dec 2011, subscription)
2. To earn my business, I'd want to mix and match some of these benefits. The policy I want is basic interruption, but with the ability to cancel for any reason and with a deductible to bring the premium down.   
3. Picture credit: 1938 vintage travel poster at eBay


Metrics: Mobile Banking, Payments, Insurance and Investment Usage

By Jim Bruene on May 8, 2013 4:18 PM | Comments

imagecomScore is compiling a wealth of digital usage data, both for desktop and mobile (see previous post). And luckily, they have agreed to let me share some of it here (see note 1).

The following chart is financial services usage data across 230 million U.S. mobile phone users aged 18 or older (note 2) in the United States as of year-end 2012. It includes any type of financial content, secure or public (i.e. this is not limited to secure access by account holders).

The data shows that 62 million (27%) of mobile users accessed financial content during the prior month (Dec. 2012 figures). The vast majority of those (87%) accessed bank content. Credit card or electronic payments (e.g. PayPal) were each used by about half the segment. And brokerage or insurance content was accessed by about 20% of mobile financial users.

Observation: The banking numbers have been widely circulated, but I hadn't seen recent breakouts in insurance and brokerage. Both were surprisingly high, especially insurance. If you assume there is generally one mobile financial user per household, that means that about 10% of all U.S. households are using mobile insurance info. Same on the brokerage side.

Source: comScore, compiled Dec. 2012


1. If you have requests, drop me a line and I'll see what I can find.  
2. Users of any type of mobile phone, smartphone or otherwise. Also includes text-message queries.


FinTech at TechCrunch Disrupt

By Jim Bruene on May 4, 2013 9:18 AM | Comments

imageThis past week, NYC hosted TechCrunch's semi-annual tech event. TechCrunch Disrupt covers the entire tech spectrum from software to 3D printers to gaming and ecommerce. Generally, the financial vertical accounts for 2% to 3% of the companies involved. That said, several notable fintech companies have done well there. Notably, Mint won the first event in 2007. And in 2011, both InvoiceASAP (demoing at Finovate next week) and BillGuard (see post) made it to the final round, (with BillGuard finishing second overall).  


Startup Battlefield

This year, three of the 30 "battlefield" companies that made it one stage were in fintech. One of those, Zenefits, was one of seven finalists called back to demo again to the judging panel. Enigma a public-dataset discovery and analytics startup, was the eventual winner.

1. OK'd by PaidPiper (description | demo)

  • Kids payment tracking and authorization service
  • Partnering with Vantiv
  • Mobile has mobile background
  • Can also be used by small biz with their employees
  • Charging parents 5% of value transferred (non-starter...needs to get to monthly subscription)

2. Trustev (description | demo)

  • "Social fingerprinting" to provide a "Trustev score" pulled from social media and other data sources
  • $20 billion lost in 2012 by online merchants
  • 27% of all online orders are reviewed by humans for potential fraud
  • Call themselves "Stripe for fraud"

3. Zenefits -- Battlefield Finalist (description | demo)

  • Free, comprehensive HR-benefits platform, monetized with health insurance commissions only
  • Displaces client company's health insurance broker to fund the free HR services
  • Co-founded by Wikinvest's Parker Conrad
  • Y-Combinator alum
  • Typically, small customers can pay up to $2,000 per year for similar services


Startup Alley Tradeshow

The "startup alley" is the tradeshow floor where more than 100+ startups and event sponsors have tables to talk to interested parties. There were eight more fintech companies there:

  • ePaisa: Mobile POS startup
  • EXP Commerce: Futures market for consumer products
  • PayTango: YC company authorizing payments with fingerprint biometrics
  • Peela: Brazilian gift card provider "gift cards on steroids"
  • Purchext: Parental spending control system using sale receipt capture/OCR (now) and/or NFC (soon)
  • Brazilian online insurance supermarket
  • TouchtoPay : Fingerprint-based payment system
  • YourCapital: Algorithmic financial advice for DIYers


Panel Discussion

Financial subjects come up throughout the program, for example three VCs over the three days mentioned that they were putting money into Bitcoin. But there was only one focused financial-services session, a panel entitled, Show Me the Money.

Panel members: PayPal (Hill Ferguson, VP), Stripe (John Collison, Co-founder), Gumroad (Sahil Lavinga, Founder)

  • PayPal launched "login with PayPal" today
  • Stripe is powering Walmart's new Goodies food-subscription service
  • PayPal used to buy $7 billion annually in digital goods (music, online gaming, etc)

Mobile Monday: Insurance Companies Expand App Functionality to Keep Users Engaged

By Jim Bruene on April 28, 2013 6:42 PM | Comments

imageInsurance companies have put together some of the more engaging mobile apps in the financial space. But  then, really, they have little choice. Unlike banks, insurance carriers (not including health) don't have the luxury of a locked-in audience checking their account multiple times each week (note 1).

Unless you are in the middle of a claim, how often are you going to pull up your provider's mobile app? (If you even remember you downloaded it). Maybe when the bill is due, if you are in the minority not on automatic payment. Maybe every few years when you switch out a vehicle or decide to tweak your coverage. But on average, it's just not going to be top of mind (or phone).

Yet, insurance companies have a big incentive to get you to use it:

Process improvements, cost savings and a better customer experience when filing a claim

imageSmartphone users can do much of the claims process, including online monitoring, right from within their app (see USAA inset). They can even use the smartphone to snap pictures and shoot video right at the accident site. This could have a dramatic impact on claims management and fraud protection. Smartphone apps can also be used to track driver performance to improve underwriting and fine-tune prices.

So, insurance companies go over the top to make the app memorable and engaging. The examples below provide a glimpse of the breadth of insurance company mobile services.

  • GEICO has eight apps. Besides the usual functionality is its main app, users may choose from three different skins (see #1 below). Either the famous gecko lizard, or the newer baby pig, or the standard corporate logo.
  • State Farm has four apps including MoveTools for planning and scheduling a household move (#2 below).
  • Allstate has eight apps ranging from typical policy holder stuff, to apps that track your home inventory (#3 below), driving performance (#4) and motorcycle trips (#5).


1. GEICO lets chooser change the app "skin" (26 April 2013)
Note: The default app uses the famous lizard in the background. But I changed it to the pig which is now shown on the main screen.

image      image

2. State Farm MoveTools helps plan a household move (iPad)


3. Allstate's Digital Locker for tracking home inventory


4. Allstate's Drivewise app syncs with special hardware to track driving performance

image     image

5. Allstate's GoodRide is designed for motorcycle enthusiasts

image        image


1. This is one of the reasons why we believe banks have a huge opportunity in all types of insurance. See our full report here (Dec 2011, subscription)

Categories: Allstate, Insurance, USAA

StreetOwl Gamifies Driving to Improve Safety and Lower Insurance Premiums

By Jim Bruene on April 19, 2013 2:07 PM | Comments

imageDuring the past few years, I've unleashed two teenagers on the streets of Seattle (sorry). They are careful drivers, but they are very inexperienced. Both would rather hop on the bus, or let me drive, than navigate the congestion, curves, and freeways of Seattle. StreetOwl's RefuelMe app

The younger one is still in the permit stage, so he doesn't have free rein quite yet. But once he becomes fully licensed, I'd love to get tangible feedback on his driving to make sure he continues to play it safe. And I bet our insurance company would like that info even more.

So, the smartphone-based auto-tracking systems seems like a win-win, at least for the parents and their insurance company. But San Francisco-based StreetOwl (note 2) has figured out a way to make it a win for the kids too. The company uses an age-old tactic: bribery.

Its RefuelMe iPhone app tracks driving behavior, earning points for proper speed, acceleration, braking and cornering (see below left). It's a lot like the Fitbit exercise tracker, which I've become obsessed with quite fond of recently.

Young drivers earn awards established by their parents. In the example below right, you can see that the driver is about 1% of their way to earning a $25 Chevron card. Results are tracked both in app (parent and child versions) and at the RefuelMe desktop dashboard.

The company plans on keeping it free and is looking to partnerships with high schools and others to get it in the hands of more teens (and their parents).


While I think most parents see the value here, it's also a difficult concept to monetize. There is a real education challenge to get trial, and an even harder problem of getting people to pay for it.

So the company has developed a version that is more tied into insurance savings, which has universal appeal. The idea is that the app can prove to the insurance company how super safe your driving habits are, then you can be rewarded with a lower price. And since Smart Owl is serving as a value-added matchmaker, they can be rewarded handsomely by the carrier (see last screenshot below).

Initially StreetOwl sees this a lead-gen program. But the startup is also in discussions with insurance companies about using the technology in place of dedicated hardware to power usage-based insurance. It could also be bundled with youth banking programs and/or PFMs as a value-add.

You can give RefuelMe a test run now. But the insurance lead-gen product is still in private beta and is expected to be released wider within a few months.   


RefuelMe iPhone app (18 April 2013)
Left: scoring system                                          Right: Dashboard with rewards

StreetOwl safe driving algorithm     StreetOwl scoreboard app

StreetOwl website

StreetOwl website


1. Hat tip to Venture Beat
2. StreetOwl is currently raising $750,000 in seed capital through Angel List. Ofer Raz and Jason Hovey are co-founders.
3. For more on banks offering insurance, see our full report here (Dec 2011, subscription)


Launching: MetroMile Launches Mileage-Based Auto Insurance

By Jim Bruene on December 5, 2012 6:11 PM | Comments

image One of the dumber things I've ever done financially is buy an old two-seat convertible on eBay. Who would have guessed that you just don't get a chance to drive that thing much in Seattle? But next July, when the sun comes out again, I'll be very happy to have it.

In the meantime, I have this nasty monthly insurance bill. Really, $60 per month to have the car sit idle in my garage? It's throwing good money after bad. I should call my agent and turn the insurance off. But what if there's a sun-break this month or our other car is in the shop? Then I'll need it.  

From the insurance company's perspective, they don't want me calling to activate/deactivate insurance multiple times per year (though they love my current zero-miles-per-winter full-pay status). The subsequent labor and fulfillment cost would wipe out much, if not all, the profitability on my account.

So, I'm the perfect candidate for pay-as-you-go insurance, and I'm happy to see it launch in Oregon, thanks to MetroMile, a VC-backed Bay Area startup (note 1). Hopefully, it will make it's way north to Seattle very soon.

How it works

imageMetroMile charges a smaller fixed monthly fee, then adds a variable charge based on the number of miles driven (with a cap at 150 miles in a day).

To calculate the mileage fee users plug a small device called a Metronome into their on-board diagnostic port (note 2). It measures miles traveled and tracks GPS location to create a rich history of your touring (see inset & screenshot 1, note 3).

Oregon residents can get a lightening-fast quote (screenshots 2 to 5) and complete the app online (screenshot 6). The quote on my convertible came was $29/mo plus 2.3 cents per mile (screenshot 4). This would be an amazing deal for me, cutting my insurance costs by 50% annually (note 4). I would save money every month I drove less than 1,300 miles. 


Opportunity for financial institutions 

It's going to take a massive education process before this new type of insurance becomes popular (assuming state regulators allow it). Show customers that you are innovative and can deliver superior value by introducing them to a financial product that could save them $20 per month for the rest of their lives. And one that delivers a rich history of their car travel (which can eventually be plugged into the bank's PFM).

You could even package it with other bank products (checking, savings, car loans, etc) to continue to remind customers that you helped save them big time. Even more interesting, would be bundling the insurance with mileage-based auto financing to provide an even bigger incentive to save money by driving fewer miles. 

Right now, in the United States, only Oregon FIs could participate (note 5). But as the product spreads nationwide across multiple providers, it could make a nice, profitable product addition to your web and mobile offerings.  


1. MetroMile dashboard showing GPS data compiled from tracking device (5 Dec 2012)


2. MetroMile homepage features 2-minute quote
(5 Dec 2012)
Note: Unlike virtually all insurance quote sites, no contact info is required to find the actual price. And you for one car and one driver, you can fill out the form in as little as 60 seconds, my actual time the third time I tried it.

MetroMile homepage features 2-minute quote (5 Dec 2012)

3. Step 1: Enter primary driver info


4. Step 2: Enter vehicle info

Step 2: Enter vehicle info

5. Step 3: The final price is delivered in the the third-pane of the application

Step 3: The final price is delivered in the the third-pane of the application

6. Finalize online app with contact info

6. Finalize online app with contact info

1. Hat tip to Pando Daily.
2. The port is available on all cars built since 1996.
3. The device could also be used to measure average speed, but GPS data collection is optional and is not currently used by the company.  
4. I was comparing my current Seattle price to a Portland quote, so that could be a portion of the difference.
5. We don't know if MetroMile is will pay for referrals at this time.
6. For more on banks offering insurance, see our full report here (Dec 2011, subscription)


Launching: EFTGuard Provides $500k in Online Fraud Protection for Business Banking Customers

By Jim Bruene on April 24, 2012 8:06 PM | Comments

image That was fast. Just two weeks after my latest appeal to the industry to provide small business owners with more security options, a new product launched today aims to do just that. And it's packaged as a turn-key, fee-based service that could be sold by banks at a $10+ per month profit (MSRP is $25/mo).  

That all sounds too good to be true. When I was first contacted by Greenway Solutions last week, I was more than a bit skeptical. But after speaking with CEO Jerry Tylman and Managing Consultant Jon Meyer, I was convinced they had something that as a business owner, I'd definitely buy.

The product, EFTGuard, is a joint venture between Greenway Solutions and Royal Group Services. They say it's a "win-win-win" for banks:

  • Helps banks meet "UCC requirement for commercially reasonable security and their FFIEC requirement for customer education and awareness"
  • Provides peace of mind to bank clients
  • Protects both the bank and each client up to $500,000 in unauthorized online transfers
  • Helps differentiate checking and deposit offerings


How it works

EFTGuard provides protection against fraudulent online-account withdrawals of $100,000 per account (with no deductible), with a maximum of $500,000 per customer. And because it's not true "insurance" (it just behaves like it), there is no underwriting hassle and the product can be purchased in just a few minutes via online form (demo here). There is, however, the usual list of coverage exclusions; for example, it doesn't cover insider theft. 

The catch? To qualify, business customers must download and install anti-malware software from Trusteer, Iron Key, or Webroot. And every computer accessing the business account must be running these protective software programs. For the time being, that appears to leave out any mobile access. 

Initially, banks looking to offer EFTGuard will need to work with one of these three malware-protection vendors in order to qualify their clients for the fraud protection. Other than that, EFTGuard is turn-key and comes with marketing support, a co-branded signup page, and full claims management.

The $500,000 coverage is backed by Chartis Specialty Insurance Company.


Bottom line

Your business customers are rightly concerned about fraud. Offering them an option to protect themselves is a great way to differentiate your deposit offerings while preventing you from getting bogged down in messy litigation with your customers.

I still have questions about how often the list of exclusions will invalidate claims when actual fraud occurs. But the company assures me that the protections are very real.

Assuming EFTGuard delivers on its protection promise AND creates a small profit center, what's not to like? I, for one, will be the first business owner in line to buy it. 


EFTGuard homepage (24 April 2012)



1. I believe insurance is one of the best growth areas in retail banking, especially in niche lines that can be explained and delivered online (see our December Online Banking Report for more about banks delivering insurance online).


Design: Lose the Combined "Investments & Insurance" Navigation Category

By Jim Bruene on January 13, 2012 6:01 PM | Comments (1)

image I spent many hours in November looking at how banks and credit unions position insurance offerings online (our report here). Many banks don't even mention insurance. And those that do often bury it under an "investments & insurance" tab. Wells Fargo is the most notable example (screenshot below).

While I understand the need to keep navigation choices to a manageable number, these two really shouldn't be lumped together. It's like Amazon having one tab for "Shoes and Goats." It's confusing for both the shoe buyer and goat shopper.

Although a number of investments contain an insurance component (e.g., annuities), for most shoppers, this is unclear. Usually investing comes first, so it's unlikely the auto insurance shopper is going to pay much attention to a navigation item beginning with "investments." That's the furthest thing from the mind of someone trying to save a few bucks to keep the family fleet running.

imageBottom line: If you are serious about selling insurance, it needs proper attention in website layout and navigation. Notice how Wescom Credit Union (Pasadena, CA) splits investments and insurance into two categories, with appropriate calls to action at the bottom of each column (second screenshot). The CU has some work to do on the landing page (it's cluttered and hard to find the quote I was promised), but it's still better than most.


Before: Wells Fargo's personal homepage with combined "Investing & Insurance" category (13 Jan 2012)

Wells Fargo homepage with combined "Investing & Insurance" category

After: Wescom Credit Union has separate columns for insurance and investments 

Wescom Credit Union homepage with both Insurance and Investment categories

Wescom CU insurance landing page (link)
Note: The only thing that stands out on this page is the Purina Care pet insurance. The all-important quote function is buried at the bottom.

Wescom CU insurance landing page


1. Image courtesy of 1st Guard Truck Insurance 
2. See last month's Online Banking Report Selling Insurance Online (for FIs) for more info.

Comments (1)

New Online Banking Report Published: Selling Insurance Online (for Banks)

By Jim Bruene on December 12, 2011 6:42 PM | Comments

image We just finished issue number 199 of our Online Banking Report. Given that it's a monthly publication, you can do the math, and see that we've been at this for a while. We've covered a lot of ground, but until now, we'd never taken an in-depth look at the insurance side of online delivery.

Why? There have been so many opportunities with core deposit/credit products that the "insurance report" kept getting pushed out into the future. From the looks of it, the same dynamic has played out in the banking industry. Sure, U.S. banks took in $7 billion brokering insurance last year (and a similar amount in underwriting). But "insurance" isn't even mentioned on the websites of 7 of the largest 15 banks. 

It's time to rethink where insurance fits in your product roadmap. Here's why:

  • It's a huge expense with premiums amounting to more than 7% of global GDP
  • Consumers are uncertain about their insurance needs and options
  • New types of insurance are even less understood
  • Online/mobile delivery (will) make it much easier to compare prices and purchase
  • Mobile delivery is especially valuable for the claims process for automobiles
  • Potential commissions and revenues are many times the $5/mo ill-fated debit card fee
  • Consumers are actually willing to pay for risk reduction/peace of mind provided

It's a win-win for banks and their customers. And we expect a burst of activity in this area during the next few years (note 1).


About the report

Selling Insurance Online (link)
Can insurance help fill the fee-income gap at banks/credit unions?

Author: Jim Bruene, Editor & Founder

Published: 9 Dec 2011

Length: 48 pages, 24 tables, 11,000 words

Cost: No extra charge to OBR subscribers, US$395 for others here


BB&T mentions insurance three times on its homepage



1. In addition to upping our insurance coverage here, we hope to bring more insurance innovations to our Finovate conference as well. Know a cool insurance startup with new technology? Email for info on Finovate


Mobile Firsts: State Farm Offers Auto Insurance Discounts to Graduates of its Steer Clear iPhone App

By Jim Bruene on March 10, 2010 7:03 PM | Comments (2)

imageLast week I talked about how USAA is making the mobile experience better than online thanks to the magic of mobile remote deposit and PIN-based login. For the sake of discussion, I'm defining magic as anything you could not have imagined doing on your mobile phone two years ago (note 1).

The latest novel financial app: State Farm's Steer Clear program that provides auto insurance discounts "up to 15%" for new drivers (under age 25) that pass its safe driving program. Users can undergo the self-assessment program online or off, but the app makes it easier and with a built-in stopwatch (screenshot below) to track the required 20 practice drives. See how it works in the company's video below (press release here; iTunes link here). 

image As much as I like it, the State Farm app doesn't quite make it into the magical category. Had it used GPS to automatically track the 20 practice drives, it might have passed the bar. I'm sure that's in a future version.

Regardless, it's clever, unique and positions the company well with the youth market and their parents that often foot the insurance bills. That's a good return on the small investment needed to port the program over to a mobile app (note 2).

1. I am using two years, since that predates the opening of the iPhone App Store in July 2008.
2. Read more about the strategic advantages mobile banking can give your financial institution in our latest Online Banking Report published today.

Comments (2)

Nationwide Insurance is Fourth Financial Institution with Multiple iPhone Apps

By Jim Bruene on January 11, 2010 6:57 PM | Comments (2)

image In November, we predicted that large financial institutions would each offer dozens of mobile apps targeted to various lines of business and/or customer segments (previous post). PNC Bank, Wells Fargo and Chase each have two apps in the iPhone store.

Three weeks ago, a fourth financial company added its second app: Nationwide Insurance.

The company originally launched an app (inset) geared towards its insurance customers in April 2009 (press release; iTunes store link). This app is designed to assist its insurance customers when they have an accident. The most recent version includes a toolkit, auto claim form, agent finder and even a flashlight.

Then in mid-December, the company released a second app geared towards automobile shoppers, Cartopia (screenshots below; iTunes link; press release). It helps buyers research prospective cars on the go.

By inputting a vehicle identification number (VIN), consumers can quickly access the following info on a prospective vehicle:

  • Car specs (fuel economy, dimensions, weight, etc.)
  • Average retail and wholesale prices
  • 5-year cost-of-ownership estimates
  • Original warranty info
  • Safety info
  • History of the VIN number, powered by Experian's AutoCheck (similar to Carfax report; limited to six free lookups each month; note 1)

In addition, users can calculate monthly loan payments with a built-in loan calculator. Nationwide also provides links for customers to call in to apply for vehicle financing and or receive an insurance quote. Unfortunately, there is no online loan application or insurance price quote engine.

Finally, the app contains space to keep notes and rate the cars you are considering purchasing.

Relevance to Netbankers: If you are in the auto loan and/or insurance business, getting your name in front of car buyers as they shop is the ultimate marketing coup. While you may not be able to emulate all the functions in Nationwide's app (note 2), even a simple loan calculator and note-taking area, along with links to your call center, could drive incremental business.

                                                                                    Cartopia #2 Main Loan info with link to
     Cartopia #1: Splash screen                          insurance quote (via voice call)

image            image

1. I was unable to access the report on my test vehicle; the error message said it was temporarily unavailable.
2. Although the app is loaded with features, its UI is a bit clunky and the app is only rated two stars in Apple's App Store. Consequently, a slimmed down, simpler app, would appeal to many users.  
3. For more info on financial services opportunities on the iPhone, see our March Online Banking Report.

Comments (2)

Snack-Sized Innovation: Safe Deposit Box Content Archives

By Jim Bruene on May 29, 2008 3:02 PM | Comments (5)

image I heard from a new company last week that has created a service to help life insurance and bank-account holders to notify beneficiaries periodically that they are named on the account. According to (see screenshot below), $1 billion in insurance policies go unclaimed each year due to unknown or lost beneficiaries. Although it sounds simple, tracking down beneficiaries can be a timely and expensive process. Outsourcing some or all of that is an appealing idea.

However, as a consumer-direct service, I don't think will get a lot of traction. The list price of $29.95 plus $3.95 per month is a lot for twice-yearly postcards (see note 1) to your beneficiaries. But the company is likely more interested in setting a high retail "value" on the service so they can wholesale it to financial institutions for pennies on the dollar.

Using the same concept for safe deposit boxes
While the beneficiary notification is an idea deserving of a second look, I was more intrigued with another of its features, safe deposit documentation and notification service. I just spent 30 minutes last Friday making a trip to the bank to look in my safe deposit to see if my son's social security card was there (note 2). Of course, it wasn't. I could have saved the trip if I'd had good records on its contents. I'm sure I wrote it down somewhere, but it would likely take much longer than 30 minutes to find it.

Ideas to help memory-challenged customers like myself:

  • Simplest: It would be great if my bank had a simple email-like software app available near the safe-deposit area where I could list the contents of the box and then email the info to myself AND store a record of that communication within online banking so I could access it years from now when the email is long lost.
  • Harder: In addition to manually entering info, have a scanner available so that I can scan copies of the documents in the safe deposit box for a digital record.
  • Hardest: Extend the service to the home/office and allow me either to store items virtually, using my home/office scanner, or by uploading/emailing documents into the virtual safe-deposit box. This is the core idea behind vSafe from Wells Fargo.

However, as Tripp Johnson at Gonzobanker so eloquently laid out in this article, there are  serious questions regarding overall demand for virtual safe-deposit services, not to mention pesky compliance issues that cannot be ignored. homepage (29 May 2008; see note 3) homepage


1. Why TWICE yearly? Once per year seems like plenty. Or how about one postcard and one email message each year? (Update 1 June: The reason for mailing 2x per year is that the U.S. Postal Service forwards mail only for six months, so with this frequency the company ensures it gets the forwarding address. (See comment #2 from Michael Hartmann of

2. My bank is requiring a faxed copy of my 18-year-old son's social security card in order to add him to my account. I'm all for good authentication (who isn't?), but that seems extreme. More on that in a future post. 

3. Sometime during the past 10 days, added the "member of American Bankers Association" seal. It's a reasonable touch, but it only means they've paid at least $1,250 for a service membership to the ABA.

Comments (5)

E-Mailbag: InsWeb Auto Insurance

By Jim Bruene on October 8, 2007 3:59 PM | Comments

Personalization of the subject line is less common in financial services marketing. Although the technique doesn't guarantee a response lift, it's a good variable to test (note 1).

InsWeb encourages customers to review their insurance coverage every six months with an eight-minute survey that begins within the body of the email.

The company creates interest by claiming a $301 average savings on a six-month policy. If accurate, it's a great ROI on the eight minutes required to complete the online form. It would be interesting to see a bank or credit union use this technique to market other financial services, such as deposits or home equity loans.

Email Characteristics

Date: Mon. 8 Oct, 2007

Time: 3:02 PM Pacific

Subject: Bruene Auto Insurance Review

From: InsWeb Customer Care


Personalization: Subject line

Full Message

 Landing Page 


1. See our Online Banking Report on Email Marketing.


Progressive Insurance Quotes Competitors' Rates

By Jim Bruene on November 8, 2005 3:22 PM | Comments (1)

Over the years, many of our pet peeves, such as lack of email messaging, have either been resolved, or are on their way to being fixed.

Here are some of the rants that have appeared in the pages of Online Banking Report during the past 10 years:

  • Failure to use email for account-related messaging
  • Too easy to login to someone else's account
  • Loan applications that were too cumbersome
  • Bill payment that was too slow and confusing
  • Lack of interbank transfer functionality

However, there is one issue that few have tackled; something we call open lending, or acting more like a mortgage broker than a lender. An open lender would give customers the option of seeing competitive lending products while researching loan options at your site.

IndyMac <> is the only major lender we've seen embrace this idea, earning an OBR Best of the Web in 2001 (OBR 73). Another company that uses this technique in its online and offline advertising is Progressive Insurance <>.

Progressive_comparison_ticker_2On its homepage, Progressive runs a near-real-time scrolling box with actual price comparisons for recent customers (see inset). It is even brave enough to show comparisons where they are NOT the lowest price. Note in the inset that GEICO comes in $36 less that Progressive; but if you watch the ticker continue to scroll, you will see a half-dozen companies with higher rates.

Why would a financial services company actually HELP its customers find a better deal elsewhere? Because in service industries, it's not ALL about the price. Do you want to stay at the motel with the lowest price in the city? Do you want to be operated on by the doctor with the lowest bid? Do you want to buy insurance from a fly-by-night discounter?

No customers want a good VALUE from a company they TRUST. And what better way to demonstrate both by allowing customers to easily compare your prices with others. Many of them are going to do it anyway. Why let them off your site to do the research? Let them stay at a site they trust, help them convince themselves you offer acceptable value, the close the sale with a super-convenient application.

In Online Banking Report #125, due out in a few days, we'll look at the pros and cons of open lending. Then in Part 2, scheduled to be published by year-end, we'll take a closer look at Progressive's comparative quote process in detail and build an open lending system that could be used by a bank or lender to deliver similar results.

In the meantime, if you'd like to look at our notes on Progressive's innovative quote process, download the Word doc here.

Comments (1)

Monetize Your Online Customers with Insurance

By Jim Bruene on May 18, 2005 12:49 PM | Comments

Insurance_signNow that financial institutions are interacting with a substantial portion of their customer base online, it becomes feasible to cross-sell niche products that don't necessarily have broad appeal.

One relatively untapped area is insurance, especially products outside the highly competitive term life and auto market. For example, in today's Wall Street Journal Family Finance column, Jennifer Saranow discussed new all-in-one insurance policies combining auto and homeowner coverage.

Other possible insurance offerings that might interest your online customers:

  • Small business coverage
  • Umbrella liability
  • Combination credit insurance that covers multiple loans and revolving balances under one policy
  • Bill insurance that would pay all previously scheduled bills for a defined period

As any insurance sales rep can tell you, it takes time to build an insurance clientele, but once built it can be quite lucrative.

For example, if you could sell a new policy to just 1% of your online banking customers each year, by the end of 10 years you'd have 10% penetration (ignoring attrition for the sake of simplicity).

If you had 25,000 online banking subscribers and you earned $100 per year per customer on insurance, by the end of the decade you would be earning $250,000 per year from your online insurance business.

While that may not be a huge number, if you put together a half-dozen niche-product cross sales programs, you could soon be earning $1 million or more per year; money you wouldn't have had without the online channel.

We'll get back to this issue in future articles.


Categories: Insurance, Strategies

Web-based Delivery Make Online Insurance A Sure Winner

By Jim Bruene on May 15, 2000 9:46 PM | Comments

Similar to electronic bill payment, online distribution of insurance has a promising future, but results so far have been disappointing, especially to investors. Witness the slide in share price at popular provider: InsWeb, whose stock has fallen from its July 1999 peak of $44/share to the $2.50/share (5/31/00). But also like electronic bill payment, the economic advantage of Web-based delivery make online insurance a sure winner. What we don’t know is whether it will be a few years or a few decades for it to take hold (Table 3).


Table 1

Web Traffic at Top Insurance Sites

unique monthly visitors (thousands)

Source: PC Data Online ; Gomez Advisors Spring 2000 Insurance Scorecard; rank among 56 providers, ; 5/00 n.r.=not rated.


Table 2

Online Insurance Application Volume, 1999

application volume




Qtrly Growth














Quicken InsureMarket






















2.0 mil


2.3 mil




Source: Piper Jaffray, 4/00

Table 3

Online Insurance Sales by Type, 1999 – 2003

$ in millions









% Tot









Term Life
















Total online








Influenced online, sold off-line








Grand Total*








Source: Forrester Research, 1999

*In comparison, total industry premiums were approximately $700 billion in 1999


HAECU is First to Offer Online Insurance Quotes

By Jim Bruene on June 18, 1997 11:58 AM | Comments

Hughes Air Employees Credit Union


HAECU was the first to offer online insurance quotes a year ago at

Hughes Air Employees Credit Union (Manhattan Beach, CA; $1.7 billion) was the first financial institution in the U.S. to offer real-time life insurance quotes on the Web beginning in mid-1996. Its service provider is QuickQuote, which private brands the service for a number of financial institutions including First Chicago, Lombard/Discover Brokerage and Security First Network Bank

Contact: Jan Cole is VP Alternative Delivery Systems at HAECU, 310.643.5558, Daniel Wager is CEO QuickQuotes in Incline Village, NV,

Categories: Insurance

Value-Added Online Ideas for Insurance

By Jim Bruene on April 13, 1997 4:10 PM | Comments

A few value-added online ideas for insurance:

Web-based services:

  • insurance needs assessment with stored input/output
  • set parameters for automatic deduction of premiums
  • insurance needs assessment module

E-mail/push services:

  • recommended changes in insurance coverage to match changing user profile
  • notification of annual needs assessment review
  • notification of changes in premium amount
  • confirmation of premium payment received
  • notice of premium payment due
  • notification of late premium payment

Categories: Insurance

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