Insurers Will Make Better Use of Connected Technology
More and more car insurance companies will soon start offering usage-based car insurance (UBI). In a UBI plan, a mobile phone app or other sensor will track how you drive and calculate the rate the company charges you accordingly.
And it’s not just established companies that will benefit from this trend — more and more startups will be getting into the UBI game. Many smartphone apps already allow individuals to compare quotes from different companies. Others, like Metromile, offer a flat base fee and then charge users based on how many miles they drive. Another, Cuvva, is car insurance marketed to infrequent drivers. Alternatives also use smartphone GPS technology to provide insurers with tracking, vehicle health reports, and tips for users. Many of these will benefit both consumers and insurers: one, TrueMotion, measures distracted driving, rates each trip and shows where drivers have room for improvement and claim to have reduced distracted driving by up to 75 percent with its users.
Mojio is another that has already partnered with big names like Google, Amazon, and Microsoft — the technology is a leader in the future of connected car services.
For those who are looking to provide more innovative services, useful and user-friendly apps, seriously custom pricing models, and data-centric strategies will be critical for success in the car insurance industry.
Pull Don’t Push
In many industries, “push” advertising has been dominant for decades. Push advertising force-feeds potential clients with flashy and catchy advertisements and marketing — think Time Square brightly lit by ads galore. More and more, the car insurance industry will be dominated by those who truly understand what it takes to “pull” customers in (or away from a competitor) rather than “push” them towards a product or service. Push is about exposure — pull is about understanding the unique needs of individual potential clients in a broader context. In order to be successful in the new era, insurers need to truly understand their client’s lives. Insuretech can help by providing data and context to individual drivers and the ecosystems in which they exist. This, in turn, will allow insurers to better understand the unique needs of clients — and in turn provide better, more individualized products and services.
It’s a Buyer’s Market
Gone are the days when paying an arm and leg for car insurance was an individual’s only option. Between car sharing services such as Uber, Lyft, and Gett and better public infrastructure in the nation’s largest cities, even driving a car is now optional for many people. But for those who drive, innovative applications, technology, and pricing models mean competition is fierce — and buyers are driving more than just their own vehicles. In addition to providing them with better data on their own driving, technology allows drivers to have fine-tuned expectations of how much they should be paying for car insurance based on their driving behaviors, vehicle make and model, the city in which they live and work, and their other traditional risk factors (like traffic tickets, age, etc).