Frictionless Insurance in a land of utility

Loic Le Muir who many will know from Le Web Conference and his new startupLeade.rs had a great interview with Alex Dayon, the President and Chief Product Officer at salesforce.com here about how owning a car is almost obsolete.  It got me thinking while I was on the move, primarily about our entire shift to utility based living and what it means for Insurance.  My comments on this below.  What do you think?

In a land where an Englishman's home is his castle, the car is often seen as the next most expensive asset that you will purchase.

This highlights to me a fundamental shift of our time to true utility living. Many folks first experience would be water charges to water meters, but that seems like an age ago now.

This move by manufacturers and others is great. The car is just the start. Now start to add bundles such as insurance, maintenance and fuel. The only thing missing of course is the driver – but we know the story there too. These sorts of schemes give the best of both worlds and more. Get to choose what model you try.  Do you want a weekend utility like Loic, something bigger for holidays away or smaller for whizzing around town. These new levels of flexibility will absolutely be come the norm.  

Many of us are used to it today, prestige car hire, AirBnB, Vacation Rentals, Handbags,Pets and so much more!  The sharing economy is continuously expanding. The key changes here for me are the added convenience enabled through technology (think calling a taxi 10 years ago vs today with an app – the difference Is convenience and data provision to you as a customer) and then business models that have changed to delivermicro experiences.

Cuvva are doing the same in insurance with policies available by the hour. Whilst a brilliant idea, technology enabled.  I would almost argue that we can get too granular sometimes. We need to be clear on what is the lowest common denominator?  Would you cover a car for 30 mins or grab a taxi, my personal cut off point would be an hour or two. Anything more and tour likely to hire a car for the day or a few hours. There is always a pivot point - its just different for different people in different circumstances.  If you have ever been to IKEA or B&Q, you often find vans you can rent for an hour in the car park because you have bought too much, an association with Hertz.

These sorts of schemes just change the entire competitive landscape and throw the experience into a wonderful great big mixing pot.

The winners here will be those that provide frictionless experiences that are both relevant and convenient.

Of course it won’t be for everyone. It depends greatly on where you live; inner city, suburbs or rural areas. Equally some look at this as another bastion of losing control. That said, think how many more hours a day you get back to do enjoyable or more meaningful stuff.  Time is is the most precious entity, period. I was reminded joyfully of this earlier on the way to London Heathrow stuck in traffic on the M25. If there are things I can do to buy more time and added convenience then I’m all in. This is the new generation – experiences far outweigh things, which coincidentally makes us all happier too!

As the old saying goes from John Paul Getty,

If it appreciates, own it.   If it depreciates, rent it!

As we move further and further to this newly accepted world, Insurance will form part of the experience bundle, whether you knew it was there or not.  The important thing is being reassured  you have it and the right level.  Equally, as I picked up a rental car in Dublin Airport, I had the hard sell on reducing the €1,500 standard excess with better insurance for just €20 per day - whilst I understand why they do this, it kind of makes me sad and gives Insurance a bad name.  I wonder how many take out this extra cover?.  Now is the time for carriers to focus on these partnership opportunities.  

Either way, I’m looking forward to trying lots of different cars without the hassle of owning any through new apps business models that allow me to try things I would never be able to own.