{"id":1368,"date":"2019-10-25T13:07:08","date_gmt":"2019-10-25T18:07:08","guid":{"rendered":"http:\/\/insurtechadvisors.com\/?p=1368"},"modified":"2019-10-25T13:07:09","modified_gmt":"2019-10-25T18:07:09","slug":"car-subscriptions-and-the-future-of-personal-auto-insurance","status":"publish","type":"post","link":"https:\/\/insurtechadvisors.com\/old\/2019\/10\/25\/car-subscriptions-and-the-future-of-personal-auto-insurance\/","title":{"rendered":"Car Subscriptions and the Future of Personal Auto Insurance"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">As we all know, Millennial consumers expect speed,\ntransparency, & online access.\u00a0 This\nis true whether we are dealing with consumers or businesses.\u00a0 There are some interesting developments that\nmight impact personal auto premiums.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">One of the most discussed is the sharing economy.\u00a0 There is a generational shift in terms of car\nownership.\u00a0 People want alternative\nownership or usage-based models.\u00a0 Layer\nin Uber and Lyft, and it\u2019s quite easy not to own a car.\u00a0 <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Ridesharing aside, car dealers and manufacturers are starting\nto sell cars via monthly subscriptions.\u00a0 Currently,\nthese lean towards the luxury market and standard in the monthly fee is\ninsurance \u2013 with very generous limits.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.accessbybmw.com\/\">BMW<\/a> launched a\nprogram where you can subscribe to cars for as low as $998\/mo.\u00a0 <a href=\"https:\/\/collection.mbusa.com\/\">Mercedes\nBenz<\/a> has a program as does <a href=\"https:\/\/www.porschepassport.com\/\">Porsche<\/a>.\u00a0 <a href=\"https:\/\/www.us.audiselect.com\/\">Audi\u2019s<\/a>\nsubscription includes rentals through their Silvercar rental company.<\/p>\n\n\n\n<figure class=\"wp-block-embed-youtube wp-block-embed is-type-video is-provider-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe title=\"Subscription Cars and the Future of Personal Auto\" width=\"640\" height=\"360\" data-src=\"https:\/\/www.youtube.com\/embed\/mGVZ12T4POc?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" class=\"lazyload\" data-load-mode=\"1\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">What\u2019s the benefit.\u00a0 You\nexchange cars when you want.\u00a0 You can\ndrive an SUV one week and a coupe the next.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.volvocars.com\/us\/shopping-tools\/purchase\/care-by-volvo\">Volvo\u2019s<\/a>\nsubscription resembles cell phone financing options and isn\u2019t as generous.\u00a0 You pay a fee for 24 months and can exchange\nafter 12 months for a new model.\u00a0 They\nare using Liberty Mutual to underwrite the policy<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At the lower end, you have startups like\n<a href=\"https:\/\/www.fair.com\/\">Fair<\/a> and <a href=\"https:\/\/www.flexdrive.com\/\">Flexdrive<\/a> who\npartner with local car dealers to provide subscriptions to used cars.\u00a0 Both companies underwrite through Assurant.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Why should a Carrier care?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Instead of having a pool of hundreds of thousands of\npotential customers, carriers may be dependent on winning a couple of large\nglobal contracts.\u00a0 In this case, the\npersonal auto business will decline while a few commercial lines carriers will\nbenefit.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The Bulls<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Subscriptions simplify\nownership and consumers like that<\/li><li>Small businesses will like\nthe fact they can increase or decrease vehicles as business needs change<\/li><li>The biggest carriers and\nbrokers will dominate<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The Bears<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Consumers and businesses\nstill want to own the vehicles<\/li><li>Profitability and risk\nexposure is unknown<\/li><li>It\u2019s only attractive for a\nsmall segment of the population<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The Path Forward<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As with anything, it\u2019s very important to pay attention to\nwhat\u2019s going on outside your four walls.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Look at the move to subscription auto thru four lenses:<\/p>\n\n\n\n<ol class=\"wp-block-list\"><li>Will this type of product\ncreate new value for you and your policyholders?<\/li><li>If you don\u2019t provide a\nsimilar product, will you lose market share?<\/li><li>How might this destroy old\nparadigms and insurance products?<\/li><li>How can this type of\nproduct help improve operational efficiency and customer experience?<\/li><\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">Evaluating the upside and downside of any new product\ninnovation positions you to better meet the changing needs of your agents,\ncustomers, & employees.<\/p>\n","protected":false},"excerpt":{"rendered":"<p class=\"card-text\">As we all know, Millennial consumers expect speed, transparency, &#038; online access.\u00a0 This is true whether we are dealing with consumers or businesses.\u00a0 There are some interesting developments that might impact personal auto premiums. One of the most discussed is the sharing economy.\u00a0 There is a generational shift in terms of car ownership.\u00a0 People want [&#8230;]<\/p>\n<p class=\"m-0\"><a class=\"btn btn-outline-secondary btn-read-more\" href=\"https:\/\/insurtechadvisors.com\/old\/2019\/10\/25\/car-subscriptions-and-the-future-of-personal-auto-insurance\/\">Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","content-type":"","wds_primary_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1368","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/insurtechadvisors.com\/old\/wp-json\/wp\/v2\/posts\/1368","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/insurtechadvisors.com\/old\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/insurtechadvisors.com\/old\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/insurtechadvisors.com\/old\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/insurtechadvisors.com\/old\/wp-json\/wp\/v2\/comments?post=1368"}],"version-history":[{"count":0,"href":"https:\/\/insurtechadvisors.com\/old\/wp-json\/wp\/v2\/posts\/1368\/revisions"}],"wp:attachment":[{"href":"https:\/\/insurtechadvisors.com\/old\/wp-json\/wp\/v2\/media?parent=1368"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/insurtechadvisors.com\/old\/wp-json\/wp\/v2\/categories?post=1368"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/insurtechadvisors.com\/old\/wp-json\/wp\/v2\/tags?post=1368"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}