Like it has for most goods and services, the Internet is changing the way companies shop for insurance.
But unlike flights or hotels, which are pretty uniform products, the complexity and variety of small business property and casualty coverage poses a challenge to insurers and brokers who want to provide customers a Kayak.com-like shopping experience.
Bolt Solutions, which has a major presence in Connecticut, is helping fill that void.
The New York company got its start building white label product-comparison software for insurers, but has expanded its business to include a Farmington-based insurance agency that has added 16 employees so far this year. It employs 65 total in Connecticut. Bolt also recently acquired a Texas-based technology company that offers product-comparison capabilities to independent agents.
The company is unique because of its broad revenue streams: It does business with big insurers, Main Street agents, and sells coverage itself.
“Some [competitors] are only providing an independent agent solution, not to carriers or consumers,” said Bolt Executive Vice President Tom Hammond in an interview at the company’s agency in Waterside 6 Office Park.
Bolt was originally founded by Israeli software engineers in 2000 as Seapass Solutions, and still has an R&D team in Tel Aviv. It changed its name in 2013, after becoming majority owned by a public company, ICG Group. The Pennsylvania-based venture capital firm paid $13.2 million in late 2012 to grow its Bolt stake from 38 percent to 53 percent. At the end of 2013, ICG owned 70 percent of Bolt.
Bolt’s main business is building Internet, product-comparison software platforms for property and casualty (P&C) insurers.
The company says it has sold the platform to six of the top 10 insurers in the country. Publicly, it has disclosed completing customized portals or programs for Progressive Insurance, Hiscox, Insurance Noodle, and a Florida insurance clearinghouse.
Bolt’s software allows insurers to quote and sell their own products online, as well as those of competitors. The insurer gets a commission if a competing product is sold.
Quoting multiple insurers is known as “comparative rating.” The concept has been around for a while, but Bolt is automating the process, making it more economical to sell a typically lower-commission product by enabling higher sales volumes, said Hammond, a former longtime executive at The Hartford Financial Services Group.
Bolt designs its online quoting system based on insurers’ often complex underwriting standards. A customer receives one to six quotes based on information they input into a three or four page questionnaire.
“A lot of the secret sauce is in how the customers describe their business,” Hammond said.
The software only spits out a competitor’s quote if the insurer doesn’t offer a certain type of coverage or a prospective customer doesn’t meet its underwriting requirements, among other factors, Hammond said.
Of course, Bolt isn’t the only player in the market. Competitors include EZLynx, Applied Systems, insurers’ own in-house agencies, and sales and comparison portals the Independent Insurance Agents & Brokers of America (IIABA) offers its 28,000 members. But Bolt tries to differentiate itself through its multi-pronged approach to the P&C market — selling technology to big carriers and small agencies alike, and pitching products directly to consumers. It also offers call center staff support, analytics and data warehousing services to insurers, Hammond said.
Bolt’s Farmington agency — Bolt Insurance Agency — is perhaps the most experienced user of its own technology. It uses the online portal to quote and sell coverage to consumers, helping generate additional revenue through commissions. Bolt launched the agency in 2010 to target businesses with 10 or fewer workers — a customer base ignored by some agents because they’re too small to be worth the effort, Hammond said. Bolt’s team felt that their product-comparison software could overcome those barriers by speeding up the buying process, allowing for higher sales volumes.
“The small entrepreneur was not a target market for any commercial channel because of size and scale,” said Hammond.
Tapping a new market
Last year, Bolt expanded its focus to independent agents — which wrote 79 percent of all commercial insurance premiums in 2012, according to the IIABA — by acquiring Austin, Texas-based Superior Access for $8.7 million.
Superior, which Hammond oversees from Farmington, provides a cloud-based subscription portal to 2,200 Main Street agencies, allowing them to quote and bind products through Bolt’s network of insurers that they don’t normally sell.
The idea, Hammond said, is to help agents never have to tell an inquiring customer that they don’t offer a particular product. After all, earning a commission off a competitor’s sale and keeping a customer happy is better than the alternative. “It brings markets to their desk,” Hammond said. “The Main Street agent doesn’t want to deal with certain products, so they can send that business to us and make money.”
Online sales tools, however, do serve as a double-edge sword for agents since they also allow carriers to quote and sell direct to consumers.
Warren Ruppar, president of the Independent Insurance Agents of Connecticut, said his membership is wary of online sales that cut agents out of the process. But agents have held their own pretty well in the commercial insurance world, Ruppar said, and they’re using the web to enhance sales, including through online quoting services provided by the IIABA.
“Are agents embracing technology? Absolutely, we have to,” Ruppar said. “Does the Internet provide a different challenge? Yes it does.”
Success tough to gauge
Bolt is clearly growing and has the backing of a modestly sized public company that did $59 million in revenue last year. And its potentially promising acquisition of Superior Access is still fresh.
But whether or not Bolt is profitable isn’t clear. Hammond said he was unable to discuss financials, though he did say Bolt Insurance’s and Superior’s combined book of business totaled more than $100 million in premiums last year. ICG keeps Bolt’s revenue and profits obscured by reporting its financial results combined with two other companies in one of its business segments.
Last year, that segment lost $18 million on $58.8 million in revenue, compared to a loss of $18.2 million on $26 million in revenue in 2012, U.S. Securities and Exchange filings show.
Correction: This article incorrectly spelled Warren Ruppar’s last name.
