Launching: MetroMile Launches Mileage-Based Auto Insurance

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

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

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.

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

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

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.

Nationwide Insurance is Fourth Financial Institution with Multiple iPhone Apps

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.

Snack-Sized Innovation: Safe Deposit Box Content Archives

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.

E-Mailbag: InsWeb Auto Insurance

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

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.

Monetize Your Online Customers with Insurance

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.