My mom called me last night to say her car insurance is going up from £340 to £370 (from $420 to $457) in the year ahead. She can't get it any cheaper and is genuinely worried about why the price is increasing. Her rationale is that she isn't driving very much, is getting older and hasn't made a claim, so why has the price gone up?
For me, this highlights part of the problem. My mom has never made a claim (thankfully), and she is basing her experience on cost, convenience and fit for her driving needs, instead of value. Yet, her car insurance is going to get more expensive next year. I don't think that she is unique here in any way, (other than being my mom; I could list plenty of ways she is unique) because when it comes to motor and home insurance, this is the typical journey for many.
I explained to her that there has been an increase in the Insurance Premium Tax (IPT) to raise more revenue in the insurance sector. In reality, the price of her car insurance hasn't gone up much (only 7%). But because of the additional IPT, it may feel like the price has gone up. To me, the provider missed an opportunity here to share what has changed and why. Providing customers with a simple insight, in this case on the IPT, could be very beneficial for both sides.
See also: Microinsurance Model in Non-Standard Auto?
As I sit here getting ready for my next trip, I've had two emails. One from the airline and one from the hotel. I've since checked in for my flight and checked into the hotel, received my boarding pass, chosen my seat, selected my room and enabled my digital door key – all in less than five minutes. This is proof that the digital experience just gets better and better. Over the years, table stakes have kept on rising, so the bar is pretty high – people must continually create better, new experiences and more barriers to entry. In my words, this whole experience is becoming more and more frictionless
! I continue to challenge all of us on how we can apply the same idea to our world of insurance – making car insurance frictionless.
Related to this, at Deloitte
we have just released our European Motor Survey
, where we interviewed more than 15,000 people across Europe, Middle East and Africa (EMEA). This year, we explored how digitally enabled motor insurance products could provide insurers with a great opportunity to increase the contact points with their customers and dramatically improve the understanding of their needs.
You can download a copy of the survey here
. We estimate that by 2020 the market share for digitally enabled motor insurance issued in Europe could reach 17%. Some highlights have been included below in the infographic.
Given my experiences this weekend, from both the preparations for my trip and m mom's renewal, the opportunity to continue to leverage digital still remains.
As always, I welcome your feedback, thoughts, insights and discussion!