Young drivers consistently pay the highest average annual cost for motor insurance — but disruptor honcho has plans to change that by making insurers lower prices
Insurtech start-up honcho has gone live with its “reverse auction” app targeting young drivers seeking cheaper car insurance in the UK.
Aiming to challenge price comparison websites, which the company claims charge insurers commissions of up to £60 per policy, Honcho will bill them £1 to bid for a policy seeker’s custom.
Within the app, an automated bidding process that takes 30 seconds encourages insurers to give their most competitive prices for motorists, resulting in lower premiums for younger drivers.
Gavin Sewell, CEO of honcho, said: “It’s been a long time in the making and words can’t describe the level of excitement that can be felt around honcho HQ now that the service is live to the public.
“Honcho is one-of-a-kind and will be revolutionary for drivers of all ages, however, we’re especially keen to see the benefits to young motorists who, for so long, have struggled to acquire fairly priced policies – with many paying 149% more than the average driver.”
A new distribution channel for insurers and brokers
The start-up has integrated several insurers and brokers into its app, including Brightside, Flux Direct, Quoteline Direct, Freedom Brokers, Marmalade and Think Insurance, which offer policies underwritten by the likes of Aviva, Allianz, Axa, LV, Ageas and Zurich.
Marmalade, which itself offers a proposition of cheaper insurance for younger drivers, saw honcho as a new distribution channel it could enhance with its telematics insurance proposition.
Andy Martin, broker & distribution director at Marmalade, said: “It’s a very exciting time for all involved — as soon as we heard of honcho’s proposition, we knew we wanted in.
“This new app has the potential to really shake up the way insurance is delivered and we’re especially excited to be reaching out to more young drivers to help them drive down the cost of insurance with the help of our black box technology.”
Car insurance could be just the beginning
The focus of honcho is currently to reduce the premiums paid by drivers aged 17 to 24, who consistently pay a higher amount, with the average currently sitting at £1,177 per year.
But after proving its model, Sewell has a long-term ambition of shaking up the industry by changing the way people buy insurance across multiple lines.
“We see honcho taking on the role of ‘matchmaker’ between customers and insurers or brokers, initially for car insurance, but with a view to offer the service across a range of other insurance products and markets later this year,” he said.
“We’re also very much championing consumers’ interests with absolute clarity and transparency in all that we do. It’s going to be the way forward and price comparison websites are going to feel us hot on their heels.”