E-bike insurance made easy: the ultimate guide for retailers
In a nutshell
- E-bike buyers expect insurance, just like for a car.
- Bike retailers can use insurance to increase revenue and customer engagement.
- Omnichannel e-bike insurance built to scale offers the biggest opportunity.
Aside from more people buying e-bikes, more people are also buying them online. Within a few years, retailers expect that more than one-third of all bike sales will happen online, compared to roughly one-fifth today – which is already the preferred route of digital-first European players like Veloretti and InternetStores.
Riders expect a sleek, easy journey where they can add any accessories or extra services in just a few clicks. One such accessory is e-bike insurance, which buyers increasingly look for when investing in a quality electric bike.
But it’s not just about providing a seamless digital experience – bike brands need to consider an omnichannel approach in order to meet customers where they are.
So how can retailers and manufacturers effectively implement bike insurance, not only to meet consumer demand but to increase revenue, customer loyalty and more? Read on to find out.
Global shift in mobility fuels e-bike sales
Historically, bikes were almost exclusively purchased for leisure, sport or weekend activities. In recent years however – with rising traffic jams, packed public transport and heightened awareness surrounding health and wellness, and the environment – there’s been a huge shift in mobility.
Not only is cycling a healthier and more eco-friendly way to get around, but it provided a sense of freedom during the Covid pandemic. According to a survey we ran with bike users, over 90% of respondents ride their bike daily or several times per week, with 38% using it for their commute. The desire for a more efficient way to get to work has led to more demand for e-bikes.
A recent report estimates that the global electric bike industry will reach $118.65 billion by 2030, up from $40.31 billion in 2019. This is partially encouraged by improvements in cycling infrastructure and better technology on the e-bikes themselves.
‘Specifically, “smart” or connected bikes with a frictionless experience will be in high demand from customers – especially as they swap out other forms of transportation for commuting or everyday errands,’ said Adrien Roose, Co-founder & CEO of Belgian e-bike brand Cowboy.
As more people ride e-bikes, and perhaps for different reasons, the profile of bike customers is shifting. Buyers are becoming part of a new mobility solution, which means they see value-added services like e-bike insurance as a crucial component.
E-bike retailers need to adopt value-added services
E-bike riders demand more from their bike provider, which means that retailers need to meet this demand by enriching their offer with value-added services.
Davy Louwers, the CEO of Fietsenwinkel.nl – the largest online bike shop in the Netherlands, one of the world's most mature cycling markets – announced in 2019 that it was changing its strategy to adapt to this new market reality and go all-in on e-bikes.
‘It’s not enough to be the cheapest anymore,’ Louwers said. ‘Client-centricity is our main priority. 44% of our e-bike sales are commuters who are way more demanding. They want a good, fast bike with a great service offering. They choose an e-bike over a company car, so they expect replacement bikes, roadside assistance and flexible financing.’
Internetstores CEO Hans Dohrmann made a similar acknowledgement, ‘The customer who is looking for a high quality e-bike to commute or the family who wants to buy an expensive cargo bike must be offered the service level that they expect according to the price.’
Now that cycling has moved from being used recreationally to a functional mode of transport, the entire purpose of cycling has changed. And this is where insurance kicks in.
In the quest for value-added services, insurance is definitely one of the lowest-hanging fruits available to bike businesses. Not only does it increase customer satisfaction by meeting their demands and providing crucial peace of mind, but it can have a larger impact on your business as a whole.
What are the benefits of bike insurance for retailers and manufacturers?
Increase e-bike conversions
E-bike customers increasingly expect insurance along with their investment.
When commuting regularly with an e-bike, many people are likely to leave it unattended in a busy city. Something happening to their bike, whether it’s stolen or damaged, could be a real nightmare for them. How else are they going to get to and from work?
Having theft and damage insurance, as well as emergency assistance, can put your customers’ minds at ease when it comes to leaving their baby – aka their precious e-bike – parked on the street.
Not only does this show that you care about your customers’ sense of security and freedom, but it can help make their decision to buy a bike from you easier.
For Dutch bike brand Veloretti insurance is about unburdening their customers. ‘Insurance is an important add-on that can help reassure customers when buying an expensive bike,’ said Veloretti COO & CFO Jitse Rupp. ‘It could be that extra nudge when deciding to buy it!’
Generate additional revenue
Of course, increasing bike conversions means generating additional revenue. But there are several other ways that e-bike insurance can increase your bottom line.
A Roland Berger survey in the Netherlands found that new bike sales account for 70% of a bike retailer’s gross margin, which leaves little room for diversification when it comes to revenue.
This means bike brands need to be extremely creative and generate new sources of revenue that do not eat away at their margin.
Guarantees and free maintenance are popular incentives to sweeten the deal, but they have a real impact on cost structure. With bike theft insurance, customers could benefit from emergency assistance or a cash stipend – which is valuable to someone who’s cycling to work every day.
This insurance could also include a voucher for policyholders to buy a new bike from your shop if theirs is stolen, which would increase your revenue and ensure you have repeat customers.
And the more touchpoints you have with your riders, the easier it will be to upsell things like service and accessories.
That being said, bike shops don’t have to wait until something happens to a customer’s bike to reap the financial benefits – they earn a (VAT-exempt) commission on every insurance contract they sell. So it’s a pretty painless way to earn revenue instantaneously (use our revenue calculator to see just how much).
Foster customer engagement
Customer loyalty and engagement go hand-in-hand with customer retention. Yet according to Roland Berger's survey, bike retailers don't invest as much in retention, which has a huge impact on customer lifetime value.
Generally, you have three options to grow your business' bottom line: increase the number of prospects, increase the number of transactions and/or increase the value of each transaction.
The latter is by far the easiest option. Nowadays, the customer experience doesn’t end when they receive their bike. In order to stick out from the pack, more and more bike businesses are investing in long-term programs to keep customers engaged with their brand.
Insurance is a way to create valuable new touchpoints with your riders post-sale and gain insights to better understand your audience. For example, by partnering with a digital insurance provider, you could see how many claims riders are filing and for what purpose. This can help better inform business decisions and allow you to respond to your riders’ needs.
E-bike providers are uniquely situated to engage with customers through built-in tech and branded apps. Including a GPS tracker on a bike, for instance, lowers the insurance premium for the end consumer.
And when something bad does happen, insurance can also help turn a negative event into a positive brand experience. Hear us out: imagine a rider’s bike is stolen when they’re out one night. They’re super upset and now have to take an expensive Uber to get home – their main method of transport is now gone.
Luckily, because they have theft insurance, they’re later reimbursed for their Uber and receive a voucher to get a new bike from your store. Ideally this is a speedy and pleasant process, where the rider ends up feeling taken care of by you – and therefore more likely to return and become an ambassador for your brand.
So not only do your customers feel cared for and protected through insurance, but they’re also more likely to interact with your bike brand and make it part of their everyday lifestyle.
Stand out from the competition
While there are thousands of cycling brands to choose from, few offer comprehensive bike insurance.
It might be a differentiator now, but due to rising consumer demand for value-added services, e-bike insurance will soon become a necessity for bike companies.
By putting your riders’ needs for security and freedom first, you can provide critical peace of mind and show that you care about your community – therefore enhancing your brand image and identity.
Offering authentic, positive brand experiences will help you stand out from the crowd.
The best way to offer bike insurance
If executed well, insurance can be one of the most valuable tools for any bike retailer. On top of generating additional revenue, it increases customer loyalty and lifetime value while boosting the customer experience.
Get the right coverage
Unfortunately, bike retailers and shop owners are not insurance experts. The result is that some offer bike insurance that excludes theft at night or includes extreme depreciation of the bike of up to 15%, while some premiums only cover damages along with a high deductible.
This is clearly not the way to build sustainable customer relationships. It’s important to find an insurance provider that is not only transparent about their coverage, but is also an expert in bike insurance to ensure that that coverage aligns with the needs of your riders. On top of that, it should be clear and easy to understand for everyone involved, so that there are less surprises for you and your customers.
A good example is the insurance program we built for Cowboy, which is 100% embedded into their purchase flow online and in app. It includes no depreciation of the bike for the first three years.
Take an omnichannel approach
It’s not just about offering the right insurance product, but offering it in the right way.
In the digital age, consumers expect retailers to meet them where they are. That means value-added services should be bundled with their purchase – online or offline – just like any other accessory.
It’s all about knowing your customers and making the experience as straightforward as possible. If your riders prefer to purchase in-store, they should be able to buy insurance directly at the counter. Or they can buy it at home later on via an online coupon or code.
The bottom line is consumers should be able to seamlessly transition between sales channels and access insurance on their own time.
Provide a one-click solution at checkout
The entire buying process should be frictionless – otherwise customers could abandon their purchase and go elsewhere. In the online world, 34% of shoppers say that a one-click checkout increases their loyalty to a retailer.
Insurance should be no different. Once a customer adds an e-bike to their cart, they should be able to add an insurance package in one click.
Not many digital insurance providers can fully integrate their solutions with third-party CRMs, but finding a partner that can embed insurance directly into your user flow is ideal. This kind of plug-and-play solution can help cut maintenance costs and limit time to market, but direct integration also ups your chances for success.
At Qover, we’ve found that when insurance is bundled with an e-bike purchase at checkout, the insurance conversion rate can reach 60%. This is a huge jump from just 5% of customers opting in for insurance when they’re redirected during the purchase process or buying through a widget.
Simplify claims management
A big part of bike insurance is claims management. After all, the experience your customers have when calling for support, filing a claim or getting their issue resolved reflects back on you.
The last thing your riders want is a long, drawn-out claims process – you want to turn that negative experience into a positive one, right? In order to do that, you need a partner that is capable of handling claims quickly and efficiently while maintaining top-notch customer service.
Another thing to consider is what language you want that service to be in. Depending on what countries you operate in, it might be good to find a claims management team capable of handling requests in a customer’s native language.
Make sure it’s scalable
Because bike businesses are not insurers, they often don’t realise how highly localised and nuanced insurance can be. And the last thing you want to do is navigate a complex web of regulations in every country you operate in.
An insurance provider that is well-versed in pan-European coverage and rollout will give you the benefit of scale while decreasing cost. Combine that with a digital-native insurtech whose solutions are easy to integrate, and you’ll be able to seriously cut down on implementation time – in other words, make sure your insurer can effectively expand along with your business.
Find a partner that will support you
Navigating the insurance value chain can be daunting for any bike business. That’s why you need an insurance partner who can support you every step of the way.
From a dedicated onboarding team to available tech support to robust customer service, we’ve got you covered.
At Qover, we’re here to help make omnichannel e-bike insurance easy and effective for both you and your customers. We have a 95% customer satisfaction rate and give our partners full visibility on the performance of their insurance through a custom analytics dashboard.
Join other fast-growing bike businesses and get in touch with us to see how our comprehensive bike insurance can help you.