Honcho is a reverse-auction marketplace which acts like a ‘matchmaker’ between customers and insurance companies or brokers. It’s available for motorists of all ages, but the company says young drivers will see the greatest benefits.
Unlike price comparison websites, Honcho charges insurance companies and brokers a £1 fee to compete for consumers’ custom. The insurers get three rounds of bidding to offer the best price, with the companies able to view rival bids. Young drivers should see a reduction in the £1,177 a young driver typically pays for insurance.
The company says insurers are charged up to £60 per policy on a price comparison website and this fee is passed on to the consumer. The £1 fee should mean that the insurance companies can reduce their own prices, it says.
It can’t guarantee the lowest price for a particular policy, so consumers may be able to find it cheaper elsewhere.
‘Revolutionary for drivers of all ages’
Gavin Sewell, CEO of Honcho, said: “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 percent more than the average driver.
“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.
“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.”
To use Honcho, consumers download the app from the Apple App Store or Google Play Store and then scan their driving licence. Insurers bid against each other to offer the price, with consumers able to use a so-called ‘Honchometer’ to see how closely each bid matches their requirements.
In common with a price comparison website, the consumer is free to choose the insurance provider of their choice.
Companies signed up to the platform include Brightside, Flux Direct, Quoteline Direct, Freedom Brokers, Marmalade and Think Insurance. Underwriters include Aviva, Axa, LV, Ageas and Zurich.
Andy Martin, broker and distribution director at Marmalade, said: “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.”