Auto Insurers Seize Growth Opportunities by Offering Financial & Insurance Tools over Digital Platforms

he average investment in fintech by automotive original equipment manufacturers(OEMs) is forecast to grow from $16 million in 2016 to $230 million by 2025 as they look to completely digitise the car finance process. Financers and insurers are responding to this digitisation drive by building deeper working partnerships with data analytics companies so they can optimise customer engagement through novel payment options such as mobile paymentswearables, and virtual currency.

“Collaborations between auto OEMs and fintechs can result in digitised, transparent, and faster financing processes,” said Shruti Pathak, Research Analyst, Mobility. “The technologies employed by both parties should simplify budget calculation, financing product search, vehicle selection, and paperwork for customers. These benefits are expected to improve customer retention rates and generate more direct leads.”

Frost & Sullivan’s recent analysis, Innovative Business Models in Automotive Finance and Insurance, Forecast to 2025, analyses the auto finance and insurance industry and its stakeholders in the North American and European markets. It focuses on identifying the factors responsible for the shift from the traditional business models to technology-based models. The study includes the trends that are likely to drive innovation from 2018 to 2025.

“Start-ups are disrupting the traditional usage-based insurance (UBI) business models with their on-demand insurance models as new mobility solutions like car-sharingride-sharing, and integrated mobility require novel insurance and dynamic business models,” noted Shruti. “Insurance providers will also offer tailored solutions such as bundled insurance policies covering electric vehicles (EVs), home charging statione-bike, and recreational vehicles.”

Finance and insurance companies will be looking to tap further growth opportunities by:

  • Providing subscription-based services, as they can create new revenue streams for vehicle lenders in the luxury car segment.
  • Integrating Artificial Intelligence (AI) in their solutions to enhance claims processing, ensure fair insurance premiums, and perform data analysis more efficiently than possible with traditional methodologies.
  • Focusing on customer-centric pricing models and value-added services.
  • Developing UBI tracked by telematics systems as well as collective peer-based insurance calculations.

Innovative Business Models in Automotive Finance and Insurance, Forecast to 2025 is part of Frost & Sullivan’s global Automotive & Transportation Growth Partnership Service program.

About Frost & Sullivan

For over five decades, Frost & Sullivan has become world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success. Contact us: Start the discussion.

Innovative Business Models in Automotive Finance and Insurance, Forecast to 2025
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SOURCE Frost & Sullivan

David Assman has cheeky response after being denied personalized licence plate

MELVILLE, Sask. _ A Saskatchewan man has come up with a cheeky response to the province rejecting his request for a personalized licence plate.

David Assman, pronounced Oss-man, wanted to put his last name on his licence plate.

Saskatchewan Government Insurance (SGI) said no because it could be considered offensive when seen out of context.

Assman says in a Facebook post that he appealed the decision but was again rejected.

In response, he added a large “ASSMAN” decal to the back of his truck that’s designed to look like a licence plate.

The move has gotten a lot of response on social media including from the SGI twitter account.

“All’s well that ends well,” said ?SGItweets.

Lengthy cases, not low offers from ICBC, at root of high legal costs

VICTORIA _ A review of legal cases involving British Columbia’s public insurer says despite public perception, the agency isn’t lowballing claimants in its settlement offers.

The review conducted by legal counsel in the Ministry of the Attorney General was released Wednesday and says the Insurance Corporation of British Columbia is running a “very sound” legal department.

It says the cases reviewed do not validate “whatsoever” longtime criticism that ICBC makes inappropriately low settlement offers with the effect of driving claimants to retain lawyers and then unnecessarily pushing lawsuits to trial.

Instead, the review says the longer a claim takes to reach a resolution, the more it costs, and it blames the difficulty of getting prompt trial dates and loose deadlines for filing court material as factors.

The review recommends compelling claimants to give more in-depth descriptions of their claims before they launch lawsuits and shortening the limitation period to 18 months for an action to begin.

It also recommends implementing a roster of independent, qualified medical experts as a source of objective assessment for soft-tissue injuries like whiplash.

The review was conducted using aggregate data, as well as 100 randomly selected claims files closed between 2013 and 2017, ranging from minor injury claims to catastrophic ones.

It was done after ICBC saw significant increases in motor vehicle accidents, as well as jumps in the number and severity of claims, the number of claims involving litigation and higher costs from them over the past six years.

B.C.’s public auto insurer heading for another billion dollar loss

VICTORIA _ British Columbia’s attorney general says the financial situation with the province’s public auto insurance agency is critical and getting worse.

David Eby says theInsurance Corporation of B.C. lost $860 million for the first nine months of its fiscal year, $273 million higher than expected.

He says that puts the Crown corporation on track for a year-end loss of $1.18 billion, compounding the blow of last year’s $1.3 billion deficit.

Eby says a key reason for ICBC’s worsening financial crisis is the escalating costs of settling personal injuries claims, which have jumped by 43 per cent over five years, and almost half of each litigated settlement is legal expenses.

Major reforms are kicking in on April 1 this year and are expected to save the public agency more than $1 billion a year, but Eby says recent financial results make it clear the government needs to do even more.

Eby says the government will have more details in the coming days on how it intends to respond to the escalating legal costs.

“Although ICBC’s financial challenges are significant, there should also be no doubt that ICBC remains a valuable public asset that provides important benefits for British Columbians,” he says in a news release.

“Our government’s job is to deliver affordable, high-quality auto insurance to British Columbians, and we will do so.”

How technology is reshaping the insurance industry

Canada has a rich history of innovation, but in the next few decades, powerful technological forces will transform the global economy. Large multinational companies have jumped out to a headstart in the race to succeed, and Canada runs the risk of falling behind. At stake is nothing less than our prosperity and economic well-being. The Financial Post set out to explore what is needed for businesses to flourish and grow. You can find all of our coverage here.


In its simplest form, insurance spreads the risk of loss suffered by one person amongst many. But in today’s modern economy, constantly evolving with the tides of innovation, insurance has never been so complex. Technological drivers of change present the industry with some of its greatest opportunities and risks in decades; however, if not managed carefully, technology could be as catastrophic as it is revolutionary to the industry.

Historically, the growth and establishment of insurance originated in the days of the shipping industry when a vessel and its cargo could be damaged or lost due to storm, loading and unloading, fire, or even pirate attacks.

Today, the rapid and significant changes in technological innovation of products present the insurance industry with its greatest risk – and opportunity – since pirates took to the seas. The most significant agents driving this change in the insurance industry are: the Internet of Things (IoT) and autonomous vehicles.

The IoT is the connector between companies, products and consumers. It can also be the engine behind the creation of a multitude of connected devices and technology that will directly present both risks and opportunities for insurers and consumers alike.

Perhaps the most significant IoT-related development is the category of wearable technology. Wearables have expanded beyond their initial explosion into eHealth and are now equipped with the technology required to communicate with one another – and with insurers. Insurers can use this technology to adjust rates and premiums to more accurately reflect usage, as opposed to simply applying statistical averages that may not represent the specific individual.

This technology has advanced to the point where consumers are beginning to endorse insurer use of wearable data, as has been seen in the auto insurance industry using telematic devices that can be connected to your vehicle to transmit user data to insurers. This technology is being embraced by consumers as an opportunity to reduce premiums for good driver behaviours. Something that should only improve with the introduction of autonomous vehicles.

More than 90 per cent of car accidents are caused by human error. The advent of autonomous vehicles is predicted to eliminate human drivers and therefore human error. This likely won’t result in a 90 per cent reduction in car accidents, at least initially, but even a conservative estimate of cutting accident rates in half means massive savings in claims paid.

Technological innovations on the road today such as advanced braking and lane keep are already reducing collisions and accordingly premiums associated with vehicles equipped with those technologies. Some savings will be offset by the anticipated higher cost of repairing these complex and expensive vehicles, but if claims paid are reduced, premiums should follow suit.

Given that 42 per cent of property and casualty premiums are derived from car insurance, significant questions arise around how the industry is going to survive such reductions in its present structure.

As part of the Insurance Bureau of Canada’s (IBC) paper, Auto Insurance for Automated Vehicles: Preparing for a Future of Mobility, the IBC sets out a “single policy” insurance framework where one policy would respond to any claim made against the “driver,” even if the vehicle is being operated in autonomous mode. In this way, insurers move from insuring not only the negligence of the driver but also any negligence with respect to the autonomous features that may have been involved. Whether the various provinces and territories will adopt this approach remains to be seen, but the insurance industry has correctly perceived a risk and is attempting to mitigate that through new opportunities.

Of course, as technology advances, so do the accompanying risks. For example, many vehicles have a keyless feature wherein simply approaching your locked vehicle allows you to open the door and drive away without using the key. Car thieves have responded with a device that detects the signal being emitted from the key fob and can boost that signal so that it reaches the locked vehicle in the driveway. The thief can then steal the car while the keys are still “safely” locked inside the home.

Consumer behaviour changes gradually and this gap between initial adoption and understanding creates an opening for criminally-minded technology experts to manipulate.

Like the sea-faring pirates of old, the new security risks will both create opportunities for insurers and raise concerns for consumers and insurers alike. To succeed in the decades ahead, insurance companies of the future need to embrace innovation and adapt rapidly. Consumers will remain the central drivers of these changes as expectations for more personalization and convenience will remain high. But in a fast evolving industry which is as vital to consumers and business as it is the economy, caution and control must be applied. Regulators will need to listen to both insurers and consumers alike to futureproof the industry and develop frameworks that protect both the sector and society.

Special to Financial Post

Robert L. Love is a partner in the Toronto office of Borden Ladner Gervais LLP (BLG) and national leader of the auto industry group. He is one of the contributors for BLG’s latest report, Innovative Industries Reshaping the Canadian Economy.

Source: Canada.com

To See, or Not To See – Tinted Windows

One of my preferred enforcement practices was to use an unmarked car and drive in the right hand lane at or just under the speed limit. This gave me plenty of time to look at and into whatever passed by on my left. Vehicle defects, failing to wear a seatbelt, distracted driving and other things of interest to a traffic cop were often easily discovered.

I recall doing this once on a cold and rainy afternoon. A car passed by me with both the front side windows rolled down completely and both front seat occupants staring resolutely ahead. Why do you think they were willing to get wet as they pretended not to see me?

As you have probably guessed by now, it was illegally tinted front side windows.

Vehicle owners who do this are surprisingly resistant to following the law.

7.05 (8) No person shall drive or operate on a highway a motor vehicle which has affixed to or placed on the windshield or a window any material that reduces the light transmitted through the windshield or window unless the material is affixed to or placed on

(a) the windshield but not more than 75 mm below the top of the windshield,

(b) a side window that is behind the driver, or

(c) the rear window if the motor vehicle is equipped with outside rear view mirrors on the left and right side of the motor vehicle.

(9) If a motor vehicle contains manufactured glass, tinting contained within the glass must meet the minimum light transmittancy requirements under the Canadian Motor Vehicle Safety Standards.

In my experience, virtually all Notice & Order #3’s were ignored. Ditto the offer to cancel a traffic ticket if the tint was removed and the vehicle presented for inspection. Sometimes it took multiple tickets and Notice & Order #2’s to correct the issue.

I know of one business that actually told their customers that if they were stopped by the police they could come back, have the tint removed, present the vehicle for inspection and then have the tint put back on. Once. Free of charge.

222   A person must not sell, offer for sale, expose or display for sale or deliver over to a purchaser for use a motor vehicle, trailer or equipment for them that is not in accordance with this Act and the regulations.

You could even find vehicles with illegal tint being displayed for sale at businesses.

8.01   No person who is engaged in the business of selling motor vehicles shall keep for sale, or sell or offer for sale, any new or used motor vehicle unless the motor vehicle is equipped as required by these regulations.

Some drivers tried to convince me, even producing a doctor’s note, that they had health or vision issues that required the tint. I could understand this for people who suffered from cutaneous porphyria, but only RoadSafetyBC can grant an exemption from these rules and they will not do so.

Why bother enforcing these rules? The information that we need to drive is predominantly visual:

  • Tint prevents other road users from making eye contact with the driver
  • Impairment of the driver’s ability to identify and react to a low contrast target, particularly among older drivers
  • Tint remains in place at night and during times of impaired visibility

So, to see or not to see. Why would you limit your ability to drive safely on purpose?

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