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The insurance industry is among the sectors which have been way influenced by the worldwide monetary disaster. Surprisingly, penetration levels are still very low, and due to the huge unexploited market, insurers are busy inventing new products. Nevertheless with the discussed predicaments, the insurance industry has naturally generated new business trends. Advances in information collection techniques are presenting benefits to customers and new sets of challenges to insurance companies. Usually automobile insurance info was being derived from sources ranging from state to county level information repositories. Today, this same data is now being collected directly from motor vehicle courtesy of technical advancements like telematics. This data can hence be applied by insurance players to derive valuable business revelations. These gigantic info have transpired as valuable tools because insurance companies can utilize the information received to form a part of their competitive advantage because this very info is also providing the industry with a deep understanding on client specific needs. Here are some of the trends shaping the insurance industry.
The Heavy Hitters. The vehicle insurance industry has been utterly flat over the last decade because it is only the top 10% players who continue to dominate the market. This control can be attributed to aggressive product pricing joined with increased spending on advertisements. The above described situation has left other little players totally out of the business whereby these smaller market players have managed to post business growth only through company express retention programs and premium client services. Players who actively utilize the already mentioned big information definitely find new growth possibilities.
Telematics. Auto insurance players have today managed to introduce something known as “usage based insurance (UBI)” where the insurance industry monitors a driver’s habits so as to package for him/her future policies. As a matter of fact, insurance players have been made to stop procrastinating on developing UBI solutions, because research from convincing sources is showing that buyer demand is poised to increase following wide adoption of UBI idea. In addition, there shall also be wide adoption of policies thanks to UBI which implies that corresponding ad budgets will be easily converted into leads.
Google self driven cars. With this concept automobile even a blind person is able to sit on the driving seat and travel to whichever destination they need. It is being forecast that these self driven autos are going to be publicly published in around 5 years time, and one key selling point with these automobiles is that they are prepared to retail cry $100K which is within the reach of the majority of homes resident in developed economies. The Google vehicles are also set to feature intense safety ratings. This obviously signifies that there shall be many-faceted implications for the insurance industry in terms of underwriting.
With the above information it is beyond reasonable data that with an all-embracing digital strategy form insurance players, large information joined with business intelligence will at last influence the general insurance industry thus dictate car policy provisiongt; New data sources will also bring in rare information pertaining to a drivers behavior hence tagging his/her profile when seeking a vehicle policy.
Spalding Scattergood, the writer, thanks Allstate agent Chris Pike, Richfield and Garfield Heights, for his revelations on auto insurance trends.
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