10 WAYS TO INNOVATE CAR INSURANCE AND MAKE IT COOL

Car insurance is the most widely held type of general insurance product in the UK (and in most other developed countries), with 74% of households purchasing one or more policies in 2016. But the homogeneity of these insurance products leads to high price sensitivity with a high fluctuation of contracts and corresponding large customer acquisition costs. The impact on insurers' profits is well known.

How can insurance providers innovate current motor insurance products to make it cool again and attract new low-risk customers? 

#1 Prevent drivers from speeding with messaging to loved ones

With innovative technologies (e.g., IoT, smartphones) it's possible to move towards "nudge" tactics, which aim to change driving behavior drivers a mobile app (or built-in device) that sends a message in the event of unwanted drivability to friends, spouse or parents. 

#2 Prevent drivers from messaging while driving

Most US states have banned texting while driving. This behavior tops the list of auto accidents. Insurers can provide their policyholders a branded mobile app to block drivers from texting while driving. 

#3 Prevent drivers from the most common road accidents

Understanding the causes of frequent car accidents and how to prevent keeps car driver safe. By watching an insurer branded video series with easy to follow recommendations, customers reduce chances of being involved an accident.

#4 Immediate feedback to drivers with positive driving characteristics

Driving a vehicle provides little if any, instant feedback if a driver could do better. Innovative technology makes it possible to provide immediate feedback helping drivers to improve their driving style and encourage them to do better. 

#5 Immediate warning when approaching areas with frequent accidents

Just like Waze (the world's most famous cop-spotting app), an insurer branded mobile app can tell drivers where the areas of regular accidents are. If drivers approach these hotspots, they get warned and can make sure they don't put them self in risky situations. 

#6 Challenge co-workers and family members on driving safe

Turn good driving behavior into a contest. Risk carriers can provide a branded app, which sets up challenges within groups (friends, family members, co-workers) to compare their driving style and scores. 

#7 Reward safe drivers directly from friends and parents

Recognition and reward fulfill a basic human need for acknowledgment and affirmation. An intelligent device can detect safe driving behavior and foster honest and authentic feedback from real human beings. 

#8 Reward good drivers with free safety training

Driving safe and careful can be rewarded. When drivers are recognized and in return are provided a free safety training, they will engage more and drive even safer. 

#9 Reward exemplary drivers with free towing service

Insurers can offer drivers to exchange their accumulated scores (e.g., collected by an app) for a free towing service, in case of a break-down or accident. In this way, the policyholder receives an additional safety feature from his insurer.

#10 Appreciate growing driving experience

Experience behind the wheel matters more than age when it comes to the safety because one of the most significant elements is anticipating hazards. It takes time to build up this experience. Why not count the mileage like an airplane or helicopter pilot? "Miles" can be collected and exchanged inside a mobile app provided by an insurer.

Innovating car insurance and making it cool again takes effort. The ten ways to refresh and differentiate car insurance will not only attract new customers, but it will also make customers safer, decrease costs of claims and increase profits.

Do you have any ideas? Please share them in the comments!