When you want a car, you've got a choice: buy or lease. At least, that's the choice you used to have. These days, people "are no longer restricted to traditional car buying and leasing methods," said Kyle Hatt at Roadshow. There's now a third option. Vehicle subscription services are here.
If you already have an online subscription to a news publication – or really any other service – then you already know how this works. "In essence, you pay a monthly fee to a manufacturer for access to several vehicles in its lineup," Hatt said. "In addition to access, this fee covers the cost of insurance, maintenance and roadside assistance."
A few years ago, when Uber and Lyft were disruptive young startups, the idea of a car subscription would have seemed crazy. Yet it was possible to see which way the wind was blowing: there was talk, for instance, about how much time (95 percent) vehicles sit parked, and how it might be possible to take those wheels out of the garage, distribute their usage more efficiently, and monetize it. Now subscription pilot programs are rolling out from BMW, Cadillac, Mercedes-Benz, Volvo, Porsche, and others.
Well, the wind is still blowing, and as for which direction – it's toward the sharing economy.
Get ready for the sharing economy
According to the international Innovation Report that Lloyd's and Deloitte released this year, 680 million people have consumed shared assets or services across the US, UK, China, Germany, France, and UAE. More than half (57 percent) have purchased insurance to cover their participation in the sharing economy. Among home sharers, 37 percent upgraded or bought a building or content policy; among rider sharers, the number was 49 percent.
"The sharing economy is an economic system based on the use of technology to share assets or services between parties," Lloyd's and Deloitte said. Because of its flexibility, as well as its power to make access to certain goods and services more affordable, it's growing, and fast.
What does that mean for insurers? Big picture, the industry agrees "that this potential market is large, growing quickly, under-developed yet tricky to insure ... as it blurs the boundaries between personal and commercial lines."
Risk (who carries it?) is the perennial question. According to Denny Jacob at Property Casualty 360, the answer requires some fresh thinking – but problem-solving isn't the only task on the table: there are also opportunities here for P&C insurers to get ahead of the curve.
For example, we know that most consumers (71 percent) would say yes to sharing if it came with insurance. We also know "there is still a gap in bespoke cover for the specific risks of transacting," Lloyd's and Deloitte said.
What could you do to meet that demand?
We’ll leave you to ponder that for yourself. Meanwhile, remember: your competitors are probably pondering it too.
The FedNat Insured Web is a great tool for our insureds!
They like having a centralized location to view policy info, make payments, upload policy documents, and elect to become paperless to receive a discount.
The insureds also can file a First Notice of Loss for a claim and access exiting claim info. Silvervine recently enhanced the site which allows insureds to upload policy documents directly to their policy. The uploaded docs go directly into our workflows and save a lot of manual effort on our part.
From my visits with agents, the agents appreciate the app for the amount of time saved on having to download and attach photos directly to the policy.
The app can also reduce the amount of staff required for a busy office to fulfill underwriting requests for photos.
When training agents they are amazed at how quickly the photos attach directly to the policy. After taking photos using the app and before they make it back to their desk, the photo is already attached to the policy. They also like the ability to attach additional photos for pre-existing damage.
Customer Service is seeing an improvement with retention as the text message definitely triggers phone calls from insureds to make payments.
The insureds love the fact that we notify them on their phones because they state that sometimes they don’t receive their mail for various reasons.
The insureds are paying more attention to the texts then to their actual mail. We try to set all of our customers up on that option if we notice that they are not currently enrolled, as it builds great customer relations as well as retention.
As a company we have adopted the use of Policy Scan for all our policies, and our agents have adopted the use of the app as well.
Not only is it easy to use, there is also no more worrying about losing photos, having to store photos or photos being attached to the wrong policy.
With Policy Scan we have increased efficiency in our workflow and reduced our exposure on the risk.
Silvervine’s core administration solutions easily handles multiple carriers within multiple states, including accounting, payment processing, immediate policy issuance and endorsements.
What started out writing one product, one line in one state has now grown into mulitple products, multiple lines and writing in multiple states. We have over $95 million in annualized premium in-force and we expect to grow by 20% during the next year all serviced by Silvervine.
Silvervine was our insurance software system of choice when we started the company in 2006. Silvervine enabled us to begin business within a few months of licensing the company. Today, we are one of the top 20 homeowner’s writers in Texas and SIlvervine’s solutions have been an integral part of our success.