Fifteen years into its existence, Credit Karma is certainly a household name. It found its path to growth early into its existence as a free credit score provider, and took off from there. 

To Rory Joyce, GM of Insurance at Credit Karma, that kind of savvy thinking—and sense of timing—are what help Credit Karma create a comprehensive and personalized financial ecosystem for 110 million people in the US. Credit Karma has moved into marketing and selling new financial products, including insurance, and it now eyes usage-based car insurance, which offers rates according to drivers’ monitored activity, as another portal for growth.

In a conversation with The Financial Revolutionist, Joyce explains Credit Karma’s vision for insurance, outlines its marketing and sales strategies, and considers the difference between cross-selling and comprehensive coverage. 

What

Credit Karma has launched Karma Drive, which monitors members’ driving habits, creates a driving score for each member, and connects them with auto insurers according to members’ anonymized driving scores. After logging a certain number of trips through the Credit Karma app, and according to members’ driving patterns, members receive discounted quotes from insurance partners. 

Why

To Joyce, the current insurance-sales landscape is defined by largely ad-hoc consumer interest. People only shop for new insurance policies when they feel they need new coverage or when they’re evaluating their financial health—but they largely lose out on ongoing opportunities to lower their rates and make carriers consistently compete on price and quality of coverage. 

Credit Karma also sees itself as a catalyst for greater public adoption of usage-based insurance (UBI). By functioning as a marketplace for insurance carriers, and with 44 million monthly active users, Credit Karma has a unique opportunity to leverage established trust with its members to deliver targeted and realistic insurance offerings to individual members. “We think we have the ability to create that tipping point given our scale,” Joyce said. “And the driving score, which is how we position this product, is actually contextual.”

Auto insurance is also a promising gateway into other insurance products. “We're broadening the value proposition around not just saving people money on auto but being properly insured,” Joyce added. “I think that will be our entrance into these other categories.”

How

Credit Karma first leveraged alternative data to establish itself as an insurance-product sales facilitator, which then got the attention of major carriers for other tie-ups. Helping members understand shifting insurance rates available to them according to changes in their credit score or by importing vehicle data helped solidify their foothold. Credit Karma invites users to import additional data, like vehicle data, to establish relevant products for their households within the Credit Karma app; Credit Karma then suggests additional products within its app and notifies users of timely opportunities. 

Rather than framing this work as some sort of “targeting,” Joyce approaches this strategy as a form of personalization that can’t exist through other mediums. “Telling a customer ‘Hey, your credit improved, so now might be a great time to save money on your insurance for your Ford F-150’ isn’t a conversation anyone can have at top of funnel,” he said. “When we lean into personalization, when we make a recommendation around insurance, it builds trust, and it creates relevance, and so people are more likely to engage with us [moving forward].” 

With upcoming volatility, Credit Karma anticipates greater need and appetite for usage-based insurance. Beyond households’ growing need to save for monthly expenses, insurance carriers have struggled with profitability and have begun to raise rates. UBI offers a way for carriers to cut costs for lower-risk customers through alternative data—and Credit Karma hopes to facilitate those engagements, deepening its trust with members in the process.