A Big Thank You To Whole Just Team
Just Auto Insurance launched six months ago, and it’s been a wild ride. It’s extraordinary to think that it’s less than two years since Greg Ferkel, Murray Macdonald and I started the company. At the time, I knew nothing about auto insurance and I’d never started a business in the US.
I don’t think anyone could have forecast just how well things would go.
Our customers pay less – often dramatically less – than they would pay with traditional insurers. By using telematics, we know how much our customers drive, as well as where and when, and what their driving habits are.
In the US today, around a third of drivers are paying more than twice what they should; these safe or infrequent drivers are subsidising the impatient and the drunk drivers and those that rack up tens of thousands of miles a year on the road. With telematics, we ensure that the safe are no longer paying more just because they live next to speedy Steve.
This isn’t just great for our customers, it’s great for our company.
Let’s look at our key metrics: loss ratios and customer acquisition costs.
Loss ratios measure how much good insurance companies are measuring risk. Generally, auto insurers pay out between 65 cents and 75 cents in claims for every dollar in premiums. (The lower your number, the more profitable you are.) For new players, such as Root Insurance, the number is typically a little worse, and they pay out pretty much all their premiums in claims.
We’re currently paying out about 50 cents in claims for every dollar of premiums, because our drivers are safer than their peers.
Of course, having profitable customers is only half the battle, you also need to bring them in the door.
State Farm and Progressive, two of the largest auto insurers in the US, have customer acquisition costs that average $792. Root (and, really, I’m not having a go at Root) is well north of $1,000. This money is largely spent on advertisements – both on-line and off-line.
When we started Just Auto, I wanted us to spend less than $300 per new customer. And I had a stretch goal of $250.
We’re only six months in, and we’ve already got that number below $250. Our medium-term target for customer acquisition costs is now $150. That’s an order of magnitude better than any other start-up auto insurance carrier.
These numbers are only possible because our customers love our offering. They love that they can get insured in under a minute, and they don’t need to speak to anyone (unless they want to). They love the flexibility of only paying when they drive. And they love the fact that we don’t discriminate: in the long-run, our prices reflect driving behaviour more than zipcode or credit score.
If the last six months have been wild, the next six will be extraordinary. We launch full coverage next month, which means even more people will be able to experience our product. We’re expecting to pass the 1,000,000 insured miles mark and the $1m annualised revenue run rate by the end of the year. We should be adding 1,500 new customers a month, in Arizona alone, by the end of next March.
Next year, we’re planning to launch in half a dozen more states. And from there… who knows?
What I do know is that the arrival of telematics players like us is going to fundamentally change the auto insurance industry. Safer drivers are not going to turn their noses up at savings that can easily reach $1,000 a year. And riskier drivers are going to finally have a financial incentive to drive better. Because telematics is about more than just saving a few people money, it’s about putting the right incentives in place to make the roads safer for everyone.
All this is only possible because of the extraordinary team at Just. Their dedication and hard work and focus is humbling. I’m incredibly proud of what they’ve built, both from a corporate perspective, and because Just is not just a company, it’s a force for good.
Onwards and upwards.
Interaction Designer at Google
1 年Amazing team! Best memories ever. Keep it up doing good work ??
Customer Experience Manager
3 年Thank you Robert Smithson for believing in this company and especially for believing in us to help build it up! I love working for Just and look forward to many more years here!
Congrats!
Chairman at Total Control Pro Ltd
4 年When are you opening in the U.K.?
Founder and CEO at Ingage Games
4 年Amazing work Rob and the team!