What's Motor Insurance Look Like Post COVID-19

To put this into context lets define the situation. 

First, an insured asset sitting in a low risk situation would typically pay a lower premium. During the current crisis this is exactly what happened globally. Driving dropped by 45% globally with spikes of inactivity that left roads empty and cars parked.  

Second, the expectation from the customer is that a lowered risk would translate into lower costs. Unfortunately, this didn't happen quickly or in a transparent way.  

Third, rebates are fine...or are they? Some regions, like the US and the UK, had rebates or deferred interest free payment plans. In other markets there was no change, depsite customers asking for it. Unfortunately money back isn't enough, customer service and empathy are what customers wanted. Instead what customers found was they had no one to call, email, or chat online...basically no way to communicate with anyone. While customer centric insurance companies did a heroic job of finding solutions to keep customers happy, it wasn't possible for everyone.

Fourth, most motor insurance customers aren't doing a great job of educating themselves or spending much time looking past the lowest price. That part isn't going to change post COVID-19 by the way.

Motor insurance buying in established parts of the world is a digital purchase process. That means it is easy to open a new Google search and look for the next review, giving customers all the options. Almost all purchases will have a touch point online and most people won't reach out with questions, they will search and then move on, that's just the world we live in today.

Now that we have some context, what will happen post COVID-19, or more accurately what has already happened that will force insurance companies to react. The first thing is that the customer expects better customer service, some empathetic understanding of their situation...meaning one size policies don't fit all, money is a driving factor but a poor customer experience is a bigger indicator of someone leaving..and never coming back (burned bridges and what not).

1. Customer Experience needs to be amazing from start to finish, and the start is way before they contact you.

2. Innovation and digital transformation will be adopted to improve customer experience.

3. To insure or not to insure will still be an issue for some segment of the market. However, micro insurance "pay by the minute" UBI programs can bring on some of the uninsured market back to a policy, if there is a focus on an easy and pleasant customer experience. "Coverage for 2 hours for your teenage driver, sure no problem that's a button push on a mobile app!"

4. Public transportation use will be down, less flights, trains, bus, and car pooling. With summer coming up in most of the world that means vacations are going to happen in private vehicles, RVs, campers. Many people will avoid hotels and people selling camping supplies are going to have one hell of a quarter. Overlanding (thanks Australia) will become more popular to explore the great outdoors. Camping is officially back and I hope to see more VW campers with the pop up roof (thanks Ben Pon)!

5. Touchless claims becomes a hot topic, while claims automation projects continue, AI computer vision damage detection starts to become real, vehicle data monetization projects start to be tested while the rest of the industry takes the non digital no monetization route. 

Don't take my word for it, JD Powers did a large survey to answer that same question.

What are you seeing in your region? Are insurance companies seeking to deliver new customer experiences?