Independence, autonomy, empowerment, confidence. These are some of the emotions people go through when buying a car. It can be both an exhausting and fun process. When it finally happens, a roller coaster of positive feelings arise — “I am finally a proud owner of a car!”.
Insurance companies go hand in hand with owning a car, as car insurance is mandatory to owning one, and strive to bring car owners peace of mind knowing that they will be protected at all times. Companies fight to offer the best conditions in the market: the lowest premium, the best coverages, the most effective customer service, the fastest claims process.
That is, in normal times.
The COVID-19 pandemic has taken a big hit on the world, and car insurance is no exception. While the majority of insurers are making a huge effort in providing the same standards of support and availability when working remotely, it is essential that they are able to adapt to the current times.
With customers staying at home in a gesture of global solidarity, the difficult reality is that their cars are forcibly parked for days, weeks, maybe months. No one knows. When organising their finances, many car owners might be wondering how they can lower their car insurance if not thinking about selling their car altogether. And that is when insurers must step up their efforts and rethink the way and format in which they sell insurance. Now and in the future.
Source: Viewsbank survey of 858 motorists conducted online 27–30 March 2020.
If you are an insurer, below is our very own suggestion that we believe will help you retain your customers while keeping your business afloat in a sustainable and innovative way.
1) Prevent customers from acting out of despair
For drivers working from home indefinitely, it might be tempting to cancel their auto insurance. To others, the solution is to remove coverages and just have a basic level of insurance.
Offer them an alternative.
With a usage-based car insurance, commonly known as “Pay-As-You-Drive”, you can support your customers with a user experience designed for the needs of the current pandemic situation. By offering them a usage-based plan, they pay only for what they drive and a small annual fee to cover the risks of having the car parked. This will help you bring financial relief in a time of distress and also make sure your customers stay with you without losing the conditions you initially offered them.
2) Deploy fast. Make the change now.
Unlike what is commonly assumed by the industry, a Pay-As-You-Drive solution is not rocket science tailored to just a few tech-savvy customers. There are several “user-friendly” formats in which this solution can be deployed. Having the customer take a picture of the odometer reading in the car and sending it to the insurer via a mobile app is one option. All it takes is for customers to have a mobile phone and your app to which they send the picture to. In the long run, you may want to assess different ways of fetching the distance driven, like connected cars. We work well with them, too.
Pay-As-You-Drive lets your customers pay only for the km they drive and save when their cars are parked
3) Work with a partner
Deploying a new product can be time-consuming and oftentimes means a large investment to you. At Habit, we are sensitive to the current times and are happy to work together on a solution that makes sense for you and your customers. We understand now is the time to be as effective in helping customers as possible, while not compromising your business.
Talk to us, let’s find a solution together.
4) Adapt. Adapt. Adapt.
It is essential that when building a new product you take into account that this is not just a temporary change. The changes in driving habits will happen. The way you assess risk for cars and drivers will change. Adapting fast while looking into the future is key now.
Let’s get started!
Our platform offers insurance products that go beyond traditional insurance. We help reinvent how you build and sell Motor, Home and Pet insurance.
We look forward to hearing from you!