“With so much change occurring in the automotive space, companies from outside the insurance industry are coalescing around a shift to mobility, which will have far reaching implications for auto insurance providers,” stated Denise Garth, SVP of Strategic Marketing, Industry Relations and Innovation at Majesco. “Mobility options are important to customers and are fulfilled in different ways well beyond traditional vehicle ownership, a significant shift that is impacting business models from automotive companies to insurance companies alike.”
Mobility brings together different elements of other markets or industries, including insurance, that enable and support an array of options. Unfortunately, the customer experience is fragmented for each of these elements, creating an inconsistent and difficult customer journey because they have to work with the different parties individually. New mobility options and experiences are emerging that will potentially reduce, reallocate or eliminate a substantial portion of today’s auto insurance premiums. To retain the customer and revenue, insurers must rethink their business beyond an auto insurance transaction to a broader mobility experience, offering new revenue options.
The research highlighted the differences between Millennials and Gen Z versus Gen X and Boomers, including:
- 28% of the younger generation use a device or app to record mileage and driving behavior as compared to 15% for the older generation – nearly a 100% difference
- 11% rented someone else’s car through a sharing service and 9% rented out their car versus 2% and 1 % for the older generation
- 30% of the younger generation are using or would use an all-inclusive vehicle subscription service – nearly four times higher than the older generation, indicating interest in different mobility options as compared to “owning” a vehicle.
- 40% of the younger generational segment would pay $10 per month for a mobility solution with access to a wide array of services, as compared to only 20% of the older generation, a 100% difference.
- The younger generation is two times more likely to buy auto insurance from a car shopping website or a vehicle manufacturer website, have it included in the purchase or lease of a vehicle, or buy it from Amazon or Google
The results of this research highlight how the next generation of insurance buyers’ use of mobility options will dramatically change, requiring insurers to change as well. To be a market leader in the future, insurers need to transition their thinking from being an auto insurer to being a mobility provider, for which auto insurance may be just one component.