The idea of insurance predates the automobile. It began with Benjamin Franklin, a renowned innovator, in 1751. In 1886, Karl Friedrich Benz and Gottlieb Daimler filed their patents for the first automobile. Over the next decade, American manufacturers fueled the rise of the automotive industry, mass producing automobiles. And in 1897 the world’s first car insurance policy was written by Travelers to a man in Dayton, Ohio. Since that first policy, auto insurance rapidly expanded to become the largest segment of the P&C industry – yet has remained much as it started over 120 years ago – a transaction focus.
But that is rapidly changing!
Traditional auto insurance is under tremendous pressure from many fronts:
- Growing use of non-owned vehicles / mobility options like rideshare, rentals (traditional and shared economy) and other local rental options like scooters and bicycles, reducing the market size for individual auto insurance purchases.
- Non-insurance providers are offering / embedding insurance for vehicles and other mobility options, potentially cutting off traditional carriers from these opportunities.
- Increased effectiveness of safety technology is putting more emphasis on prevention and less on traditional indemnification, putting downward pressure on auto insurance premiums.
- Connected devices are enabling mileage, location, weather-related and driving behavior-based underwriting and pricing, which could lower premium volume or make it less predictable.
- And the rise of on-demand insurance for mobility options is rising.
With all of this change, an even greater threat may be auto insurers’ continued 100+ year view of auto insurance as a policy transaction, rather than offering a customer experience. Instead, auto insurers must reimagine the scope of what they will offer to customers – an experience with a risk product and services that are part of a broader mobility ecosystem. This is where exciting new business opportunities await. And where new competitors are emerging including automotive companies, rideshare companies and others.
Majesco recently completed new research with consumers by generation to surface insights about what they are doing and expecting within a broader mobility context – that goes well beyond auto insurance!
Watch this webinar to learn how your next generation of customers is changing the rules for auto insurance in the future of mobility.
Denise Garth - SVP, Strategic Marketing, Majesco
Glenn Westlake - VP, Strategic marketing, Majesco