I was wrong about embedded insurance.

Originally posted on Linkedin on July 17, 2023

A few years ago, I started Purple.Insurance - the dealership technology company that merged with Salty and then sold to CDK in 2021. Purple/Salty was built on the idea that if consumers had the opportunity to review competitive auto insurance rates from leading carriers at the point of buying a car, they would see the savings potential and switch to a carrier with the best rate. It would be a win-win for the customer and the auto dealer. The customer would realize substantial cost savings and the dealer would be part of the policy commissions.

What seemed like a great idea in theory delivered lackluster results for the dealer. We, like other embedded insurance technologies, were trying to cram a square peg into a round hole and it simply didn’t work.

What I didn’t consider, or couldn’t predict at the time, were these three realities:

1. It hurts car deals. When consumers consider the additional cost of insurance, on top of their monthly car payment, the amount they’re willing to spend on a vehicle or F&I products goes down.
2. It’s a time and resource suck. Insurance is a heavily regulated industry and selling it in-dealership requires a tremendous amount of process, not to mention an appropriately licensed business. Most dealerships find that the ends simply don’t justify the means.
3. There aren’t enough shoppers. On average, only 3-4% of people are uninsured and need to shop for insurance during the car buying process. Another few percentages can be convinced to shop but most would prefer to simply stick with the carrier they already know and trust.

We learned that what’s really needed in-dealership isn’t a tool to sell auto insurance. What’s needed is simply an easy way to validate and update the existing auto insurance policies for the 85% or more of people who don’t want to shop at all.
Enter Gather, the technology upending embedded insurance.

For the past eight months, I’ve taken all the learnings from my experience with Purple.Insurance/Salty and built a new and better solution that addresses the consumer's need for a basic policy update and the dealer’s need for proof of insurance.

Here’s how it works. Once a car deal has been reached, the car sales professional asks the customer, “Would you like to add this vehicle to your existing auto insurance policy?” If the customer says yes, the car sales professional pushes a button in their DMS and three things happen: 

1. The consumer’s coverage is validated directly.
2. The car the consumer is buying is added to their existing insurance policy.
3. The Gather Guarantee™ is delivered, which ensures the dealer is protected from loss due to uninsured claims prior to receiving financing on the vehicle. 

It’s that simple and takes 50 seconds.

If the customer doesn’t have insurance, the dealer can use Gather’s partner agent network (or their own in-house agency) to find a policy for the customer.

The results are clear: Every customer’s insurance need is satisfied and they can take delivery of the vehicle sooner. Plus, the dealer no longer has the time consuming task of tracking down the customer’s insurance agent to update the policy over the phone - a process, or lack thereof, that is no longer Safeguard compliant as of June 9th, 2023.

I may have been wrong about embedded insurance. But I’m not wrong about dealers needing an insurance solution that works within their dealership processes. This is why I created Gather - an all-in-one insurance solution that will help auto dealers get out of the insurance trap altogether.

I’m pleased to announce that Gather is now accepting dealer clients. We invite you to schedule a 15 minute demo to learn more about how our technology can solve your insurance administration woes - all while driving additional recurring revenue for your dealership.

I open the floor to your comments and feedback.