At the end of the day, auto insurance is a numbers game. The insurance companies that come out on top know how to get (and keep) clients and price their risk appropriately.
But that’s much easier said than done. Insurers are always trying to crack the code to set them up for more exposure and improved loss ratio—but it can be elusive, especially if you’re reliant on legacy or inefficient tech solutions.
Insurtech has been the game-changer here. Artificial intelligence, machine learning, and big data have created a paradigm shift—motor insurance companies that undergo a digital transformation can outperform others, because of the edge these tools provide.
That’s why we highly recommend investing in an auto insurance PaaS (platform-as-a-service). It’s one of the best ways to reach new markets and buyers. Just as true, not implementing a PaaS can leave your insurance company vulnerable to competitors.
So let’s try to get a better understanding of what an auto insurance PaaS is and how it can help you reach new markets and buyers.
What is an auto insurance PaaS?
An auto insurance PaaS is a software platform that can help you offer new products, monitor your risk, gain insights into your data, and more. Think of it as an instant upgrade for your current systems that fits within your existing framework.
One of the biggest goals of an auto insurance PaaS is to innovate by bringing new products to the table—like usage-based insurance (UBI) or embedded insurance. In addition, a good auto insurance PaaS will speed things up by streamlining the current operation. That means automating certain processes and bringing better insights to others. One of its superpowers is the ability to better analyze risk by leveraging cutting edge technology, and ultimately formulate smarter pricing models.
Let’s take a look at how this can help transform an insurance company’s bottom line.
Reaching new markets and buyers with an auto insurance PaaS
According to Bain, “insurance customers, especially younger and digitally active ones, are open to new entrants.”
It should be noted in the graph above that, while millennials are significantly more interested in exploring new insurance providers, nearly every country had at least half of those surveyed open to a change.
This exists as both a threat and an opportunity—these are your customers who could jump ship. Just as likely, though, these are your competitors’ customers who could climb aboard your boat.
But far too many insurers are unable to access new markets, lacking the infrastructure or resources—while others have the means but can’t find a way to do so profitably. Insurtech can be a differentiator here, helping access dynamic GWP opportunities.
What segments do you not reach today, that you should? It’s easier to scoop up new customers than reconfigure existing market segments, which can be internally disruptive.
Some people don’t want or need standard insurance, because of the nature of their life (they don’t drive much, they live in different places during the year, etc.). If you can offer flexible products and solutions that will work for their lifestyles, they’ll be more likely to work with you.
An auto insurance PaaS will give you a streamlined way of launching new products, many of which will be plug-and-play and require minor inputs on your side.
Align Yourself With Rising Trends
Car insurance costs are rising and will continue to rise. According to MarketWatch, there are several catalysts to this phenomenon:
- Cars are more expensive to build and repair
- Distracted drivers are on the rise
- People are driving faster since the pandemic began
This is likely why UBI and temporary insurance are on the rise—they’re better fit solutions for people who don’t drive often and find these trends expensive.
With a PaaS, you can easily and quickly adapt your technology to new trends in the insurance marketplace, rather than waiting to manually upgrade your existing legacy tech, piece by piece.
Leverage a More Accurate Risk Engine
How accurate are your individual risk scores for your customers? Each unique journey has its own parameters and challenges—that’s why it’s so important that your risk can be adaptable on a mile-by-mile basis. We call this “finding the true price of risk.”
With an auto insurance PaaS, it’s all possible.
By implementing a more accurate risk engine, you shine a light on the correct pricing of non-standard segments, making them a more appealing market segment to insurers who previously shied away. And your customers (current and future) will be happier with a transparent, accurate solution that saves them money.
Inaza is your auto insurance PaaS
Inaza is an auto insurance PaaS that helps companies reach new markets. Using big data, AI, and ML, we provide plug-and-play solutions like UBI and embedded insurance. Of course, that helps our insurers reach new markets and buyers.
Our PaaS is configurable, meaning you can build new features while still getting clear insights from all your data.
If you want to see how we work, let’s talk. Reach out to us and let’s get the conversation started.