{"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, &amp; online access.&nbsp; This\nis true whether we are dealing with consumers or businesses.&nbsp; 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.&nbsp; There is a generational shift in terms of car\nownership.&nbsp; People want alternative\nownership or usage-based models.&nbsp; Layer\nin Uber and Lyft, and it\u2019s quite easy not to own a car.&nbsp; <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Ridesharing aside, car dealers and manufacturers are starting\nto sell cars via monthly subscriptions.&nbsp; 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.&nbsp; <a href=\"https:\/\/collection.mbusa.com\/\">Mercedes\nBenz<\/a> has a program as does <a href=\"https:\/\/www.porschepassport.com\/\">Porsche<\/a>.&nbsp; <a href=\"https:\/\/www.us.audiselect.com\/\">Audi&#8217;s<\/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.&nbsp; You\nexchange cars when you want.&nbsp; 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&#8217;s<\/a>\nsubscription resembles cell phone financing options and isn\u2019t as generous.&nbsp; You pay a fee for 24 months and can exchange\nafter 12 months for a new model.&nbsp; 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.&nbsp; 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.&nbsp; 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&#8217;s 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, &amp; employees.<\/p>\n","protected":false},"excerpt":{"rendered":"<p class=\"card-text\">As we all know, Millennial consumers expect speed, transparency, &amp; online access.&nbsp; This is true whether we are dealing with consumers or businesses.&nbsp; There are some interesting developments that might impact personal auto premiums. One of the most discussed is the sharing economy.&nbsp; There is a generational shift in terms of car ownership.&nbsp; 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}]}}