Finance Fox: The Future of Insurance?

By Gemma Saluta and Jonathan Reich

It is common for North American insurance companies to take inspiration from international markets.  One new product of interest is Switzerland based, FinanceFox.  From an app that you download on your phone, you can compare insurance companies and receive personal advice.  Finance Fox advertises that you can compare insurance policies from different insurers and across multiple lines of insurance from their app.  The customer pays nothing, and Finance Fox receives payments from the insurance companies “for reducing administrative tasks and managing insurance contracts on their behalf.”  This is typically a broker’s fee that is anywhere from 8% to 15% of the premium.  The user appoints Finance Fox to be its personal broker, so that the company can represent the user in any insurance matter.  As with many benefits that get renewed every year, the company likely has the opportunity to realize a larger profit margin as customers renew policies. 

So the question then becomes, is this viable for the US market?  We certainly see current insurance companies putting out their own apps, but we rarely see on that tries to compare products from multiple companies, let alone act as a broker.  In order for this product to take hold in the US, we have identified several issue areas that would have to be addressed:

•  Multiple state licensing requirements
•  Licensing requirements across different lines of insurance
• The practicality by the user of reviewing insurance documents over a small screen
• Clarification regarding issues of procurement
• Multiple state laws regarding agency 
• Ensuring adequate communication so that the customer receives the policy he or she requests
• Data Security

Our economy is pushed by innovation.  This online marketplace for multiple policies across multiple insurers is a novel concept.  Hopefully, we can learn from the European market response whether this concept is worth pursuing in the United States.