UK's first 'reverse auction' car insurance app
honcho, which is the first reverse-auction marketplace app in the UK, requires insurers to bid against each other for customers, competing for their custom in real-time.
The bidding process takes just 30 seconds, goes through three rounds of bidding in real-time and encourages insurance providers to offer the best possible policy and price to the consumer. During the process insurers get to see how much their competitors are bidding for the customer's business and can therefore reduce their own prices to try to win.
Unlike price comparison websites which charge insurers expensive commissions of up to £60 per policy which is passed onto the consumer within the price they pay, honcho charges insurers and brokers just £1 to compete for consumers' custom. This encourages more competitive policy prices for motorists.
Users are able to request further bids, and the insurers' or brokers' £1 fee allows them to re-bid for each user as often as asked across a four-week period.
honcho aims to reduce insurance costs for all – and especially for young drivers aged 17-24, who typically fork out £1,177 or 149% more than the national average on annual car insurance fees.
The honcho app aims to challenge price comparison websites which have come under increasing scrutiny over the last year for charging insurers expensive commission fees and often preventing insurance providers from offering better prices on their own websites.
For its launch honcho are focussing on the young driver market, and multiple insurance providers including some of the UK's most recognised brands are bidding for customers' business on the platform, including Brightside, Flux Direct, Quoteline Direct, Freedom Brokers, Marmalade and Think Insurance, with insurance underwritten by names including Aviva, Axa, LV, Ageas and Zurich.
Gavin Sewell, CEO of honcho, said: "It's been a long time in the making and words can't describe the level of excitement that can be felt around honcho HQ now that the service is live to the public.
"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."