The usage based insurance (UBI) market is an ever-growing industry, with an estimated 100 million vehicles set to be insured worldwide with telematics policies by 2020. This is set to grow to nearly 50% of the world’s vehicles by 2030, generating more than €250 billion in premiums for insurers.
But insurers and OEMs face a growing conundrum: what do their UBI or connected car propositions include? Currently the insurance market is using policy premium discounts through driver behaviour management, vehicle diagnostic data, vehicle location, mileage data and the integration with vehicle servicing providers (windscreen, breakdown recovery, MOT) to create various product offerings to its potential clients. The solutions available appear very similar to the consumer, with the only tangible difference being certain products having a different focus point depending on the target market – whether they be on discounts, safety, or vehicle management.
Having been involved in the UBI market for the past 8 years, specifically looking at the design, implementation and support of UBI propositions, Omnia understand the complexities and barriers that insurers face when designing and launching a UBI connected car product. It’s becoming increasingly apparent that the major challenge insurers and OEMs need to resolve is how to move away from the notion that their service offering is a grudge purchase and rule out the perception that ‘big brother is watching’.
We believe that the integration of the familiar solution elements mentioned above, in conjunction with the inclusion of value added services outside of the vehicle sector is where we can provide the consumer with genuine benefits. This, alongside good customer service and improved convenience, will increase the rate of uptake and willingness to purchase usage-based insurance products.
As Dan Cunliffe, managing director of Pangea and one of our partners, argues: “I believe taking a customer-centric approach to UBI is the right decision. Being rewarded by brands and services through using UBI can be a real benefit to other industries and certainly support economic growth. This suggests there could be a larger opportunity for industries to get involved with UBI from a brand loyalty or discount perspective.”
So, does the auto insurance ecosystem match up to demand? In a market that is still trying to define itself and its product offerings, we believe the automotive insurance ecosystem is effectively meeting the demands of this evolving industry. Omnia are using their insight and creativity to effectively help insurance companies design these integrated product offerings that satisfy their customers’ demands, while also ensuring that the insurers receive a return on investment from the implemented technology.
Read more at http://www.connectedcar-news.com/news/2016/aug/23/how-does-new-auto-insurance-ecosystem-match-industry-demand/
