The Future of Car Insurances

The Future of Car Insurances

Yanosik is one of the most popular smartphone applications used by drivers in Poland. Though it not ousted CB-radio from the Polish roads, but won a large group of users. Now Yanosik developers planning together with ERGO Hestia (insurance company) to offer users the opportunity to buy mandatory insurance, and those who ride in accordance with the rules can get also special discounts.

Yanosik’s cooperation with the insurer is not surprising – it’s a very natural step. Yanosik directly reaches many drivers, Ergo Hestia has a product that drivers must buy. Symbiosis. However, insurers for a long time complained that business associated with the OC is average when it comes to profits. What besides raising rates insurer can do to make the business more profitable? Increase knowledge of the customers. And it might just give Yanosik and others acting similarly.

Yanosik collects data – that in the future will want to insurers

Insurers want to earn as much as possible, on the other hand, drivers want to pay as little as possible. It’s hard to find an agreement – always someone is less happy.

The option when you get the discount for non-accidents driving it’s fairly not the best. Why? Because it says not much about the driver. If you drive in the city like Warsaw, there is a big chance that you will have some small accident. I mean – no casualties, no severe damages, just two cars hit with the effect of broken lights or front / rear bumper. Everyone who drives a car knows that you can become an accident participant in a second. Very often, the accidents happen when you drive not faster than 30-40 km/h. For the insurer, it’s still an accident which causes a change in insurance regulations. Which means that if you provoke an accident, you will lose your discount. Does it mean that driver who causes such an accident is more dangerous than the driver who notoriously exceeds the speed in cities for example? I think not. From the other side, the driver who exceeds the speed often but he was never caught up by the police is the good driver from the insurer point of view.

Today, the option to use Yanosik application and to get potential discounts is voluntary, but it may change in the future. And I think it will change for sure.

Even today, cars are equipped with the systems that can notify the service that the vehicle had an accident. And if they can send such information, they can also collect and send more – about all you drive style. And there are more interested with such knowledge: insurers, the police and all the other more or less uniformed services and, of course, advertisers.

The most interesting fact is not if it happens but when? Will we have to deal with a change of law, which impose on drivers to have anything that would be able to register and submit information on how the driver drove or drivers will find discounts as significant enough benefit to voluntary use applications such as Yanosik?

The first option means that 100% of drivers is monitored, the second option gives a chance to choose, so some of them will never decide because of data protection.

In my opinion, at first we will see more and more applications and offers like that, and one day Google and Facebook will come into play. Google, in fact, is ready to do it today. They can use Google Maps and base on some global deals with biggest insurers in the world to implement such a solution quick. The insurer would learn much more about us than only driving style (the number of kilometers we drive daily, the average speed, how often we stop at gas stations, etc.) but also what we are looking for on the Internet, what we are watching on YouTube, etc. Base on this there is a possibility to create the interesting profile of driver and to predict a probability of an accident. Sounds like „Minority Report”? Deal with it and say hello to technology.

Insurance business it’s big money, so I also believe for Facebook. Mark Zuckerberg’s empire is also able to create profiles and also has no problem with launching such a service. After all, millions of drivers already installed applications like Facebook or Messenger and they have it when they drive. To have another on is not a big deal.

As I wrote before, the knowledge about our behavior on the road is absorbing for authorities and police. If every car would be equipped with the device that monitors speed, the speed cameras could be removed, and a number of police officers that control the roads could be decreased.

I can imagine such a situation – driver exceeds the speed limit and gets penalty, applications sends communication to bank (to block funds), to police (penalty points – in Poland when you collect 24 points during 12 months you will lose your driving licence), to insurer (driving style and penalty information) and last but not least to Tax Office in case that you don’t have a proper funds on your account. I can bet that such a vision is very tempting for authorities and it’s hard to believe that no one thought about it yet. Some of the drivers will protest? Well…

It is also possible that in the voluntary model some of the data will be pass to authorities.

In Poland, poeple are not so much interested in buying insurance on the Internet

Yanosik is trying to diversify revenues and doing it in the most obvious way. Driver = mandatory insurance. The database of drivers using the application = big sales opportunity. That’s the theory. On the other hand, is the practice, which shows that it does not have to be like that. According to the report, „E-Commerce in Poland 2016. Gemius for e-Commerce Poland” people are not so much interested in purchasing the insurances through the Internet. Buying insurance via the Internet declares only 20% of respondents, and you have to remember that this „insurance” in general, not just insurance for cars and drivers.

Source: Report „e-Commerce in Poland 2016. Gemius for e-Commerce Polska”

Even worst it looks if you look at the answer to the question „What are the products you intend to buy in the future.” The insurance was in the last place with a score of 18%.

Source: Report „e-Commerce in Poland 2016. Gemius for e-Commerce Polska”

Similarly, small interest in insurance purchase on the internet is in Serbia. According to a survey conducted by Gemius Serbia, it shows that only 7.4% of the respondents is interested in buying insurance on the internet.

Source: Report „e-Commerce in Serbia 2016” by Gemius Serbia

This is entirely different in Lithuania, where insurance is much more popular. Here, to buy insurance on the Internet declares 50% of respondents.

Source: Report „e-Commerce in Lithuania 2016” by Gemius Baltic

The future is clear

However, regardless of the current popularity of the purchasing insurance through the Internet, the future seems bright. Sooner or later, more and more people will be entirely voluntarily using the applications that let them buy insurance policy cheaper. In the end, and so we use smartphones with various applications through which we pass our data for free, and therefore profit in the form of a discount on something can work efficiently. Recent increases in insurance rates in Poland can only accelerate the process, especially since this is probably not the end of growing prices.

Contrary to appearances, quite a few drivers may find that there will be not a great challenge to drive by the law on the road home-office (shop once or twice a week) – home, especially when you can keep this way a few hundred in your wallet. Especially that there will be many more companies that would like to offer some specials for drivers, especially excellent defined. Bluetooth 5 can help here as well, especially that it says more and more often that it will revolutionize the marketing.

And when the usage of such applications that control the driving style becomes commonplace, the authorities will have a much easier task to order using them to everyone. Today it is hard to believe, but not so long ago self-driving cars were considered as science-fiction.