Consumers seem to become more open to Pay How You Drive insurance
Recent research shows that Pay How You Drive (PHYD) Insurance gains traction under consumers in The Netherlands. In the past years, many projected this type of insurance to flourish. Yet, the amount of insurers that offer the product is low and the market share is less than 5% of the total motor insurance market. Oliver Wyman believes that PHYD types of insurance are beneficial to a lot of stakeholders, including and in the first place to the consumers, but also to society.
In this article we give an overview of the developments regarding PHYD insurance in the Dutch market and present five imperatives for insurers to increase the value of PHYD products and services to both the insurer itself and, even more important, to its customers.
A good starting position for insurers
We believe that the current attitude of consumers and the current position of insurers pose a good and needed basis and scenery for the further development of PHYD type insurance. This positioning is also relevant when taking future expected developments around platforms and ecosystems in mind, where insurers need to cooperate with other industries, data processing becomes essential, sales channels may change and customer behavior is expected to change with it as well. Therefore, (Dutch) insurers should continue their journey towards these relatively new and innovative products.
Five imperatives: The willingness to share data is key to deliver PHYD products
To be able to successfully bring PHYD insurance to market, the triggers are the trust from consumers to share their personal data for this service and the benefits the consumer gets in return. The latter trigger is normally inherent to the product and a multitude of possible solutions are present. The first is less obvious for insurance and depending on more influences. Our five imperatives as presented in the article give a basis to gain the needed level of trust from the customer and position the insurer in pole position to secure access to customer data and customer interaction.