Gross written premium (GWP) is the lifeblood of motor insurance companies. And no matter how much automobiles and technology evolve, gross written premiums will always be about one thing: people believing in your product.
That’s why the best insurtech is customer-focused.
Gross written premium is a function of customer satisfaction, and the digital transformation that comes with insurtech is a gateway to increase your customer happiness.
What do customers look for in insurance?
Every insurer competes for customers, but not every insurer properly considers its customers’ needs. At the heart of this issue is user experience—what is a user looking for when they engage with an insurance product?
According to Bain’s Customer Behavior and Loyalty in Insurance report, insurance customers want three things:
- Transparency: Clear, understandable policies
- Palatable Pricing: Options for policies at reasonable prices
- Strong User Experience: Seamless, uncomplicated interactions
Innovative insurance companies abide by these principles as their customers’ needs evolve (especially in the wake of COVID-19). And things are changing. According to Oxbow Partners, we’re driving our cars shorter distances every year. Although the pandemic exacerbated this trend, the downturn started two decades prior.
Oxbow also notes that, while more people have a license today than ever before, cars are driven smaller distances in general. A growing percentage of automobiles drive less than 5,000 miles annually.
This is where cost, transparency, and user experience can be a point of differentiation for insurance companies. After all, the most significant difference most potential customers will see between you and your competitor is which company makes the experience more pleasant (or less painful). That can mean the difference between your gross written premium skyrocketing or staying flat.
Transparency can help increase gross written premium
Transparency is crucial—customers need to understand how the policy works for them. That’s why personalization in auto insurance, especially with the advent of insurtech like Usage-Based Insurance (UBI) and temporary insurance. These solutions provide crystal clear costs—you know when your insurance begins (when you enter your car) and ends (when you exit your car).
It’s no surprise UBI is growing at a compound annual growth rate (CAGR) of 25.4%, according to a Research and Markets report.
But it’s not just transparency of rates—it’s transparency of behavior as well. Too many UBI platforms punish drivers after the fact for mistakes they didn’t even know they were making. A better way forward is helping them be aware of their behavior in real-time, so they can correct their actions and drive safer.
Compelling insurtech solutions will help attract new customers while increasing retention, which should be a successful recipe for increasing gross written premium.
Want happy customers? Try making your pricing palatable
Palatable pricing goes beyond just providing competitive premiums and pricing. According to a Deloitte Future of Insurance survey, a “key reason” why people choose motor insurance is because they want something “connected and cost focused” that
- Can save them money (if they drive less)
- Provides a fair service
- Rewards good driving
UBI (done properly) can accomplish all three of these things. Consider the large portion of drivers that travel less than 5,000 miles annually—this is actually the recommended distance for UBI by RAC for their UBI scheme in Ireland.
Our UBI platform provides transparent behavioural telematics and environmental risk data enrichment along with existing enrichment sources for advanced risk profiling. While this helps insurers land at the “true price of risk” to ensure profitability, it also helps customers see how they’re driving in real-time, and gives them clear indicators as to why their trip costs what it does.
While non-standard insurance may not carry the same price tag per customer as standard insurance, it often equates to better profitability per customer, thus leading to a more compelling gross written premium.
Strong user experience is the key to customer-focused insurtech
While strong user experience is important for all industries, it’s often overlooked by insurance companies. Ease of use is hyper-important—according to a Watermark study, companies that excel in user experience perform 3.4 times better than their competitors who lag in user experience. For insurtech, it means keeping things simple to use and seamless to get started (having a mobile app, only needing a few clicks to get started, etc.).
A practical application of this can be seen with call centres. People generally don’t like them. in fact, three in four customers get frustrated speaking with call centres, even if their problem was resolved.
Automation capabilities mean better user experience—policy quotes, renewals, and sign-ups can all be executed through an app with a few clicks, saving customers time and frustration. This helps keep happy customers, which helps keep your gross written premium happy.
Are you ready to boost your gross written premium?
Retention and acquisition rates are often dependent on the quality of your pricing and customer experience. Transparency, pricing, and user experience can all be enhanced with the right insurtech. We built Inaza with this philosophy in mind.
With our plug-and-play non-standard insurance solutions, you can offer new, transparent products to your existing clientele and reach brand new markets. Our real-time risk engine helps you refine your pricing with artificial intelligence and machine learning. And it’s all carried out through a simple and clean user experience that can be onboarded in just days.
If you want to explore how to grow your gross written premium with our smart insurtech platform, please don’t hesitate to reach out to us.