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Omnichannel insurance for car manufacturers: the key to a better customer experience

Automotive & mobility
Words by
Alex Vickery
Time to read
6 minutes
Last updated
April 22, 2024
In a nutshell
  • Most car manufacturers offer insurance, but rely on traditional insurers for tech. Now, they want to have more control over their insurance customer experience.
  • An omnichannel insurance program is key to reaching customers at the right time, through dealerships, digital channels, etc.
  • Traditional, multilocal insurers tend to lag behind, whereas insurtechs are adept at creating a seamless and global experience.
  • Telematics data can improve the claims experience and enable OEMs to differentiate their product and pricing.

In a panel at Insurtech Insights, Qover’s Global Head of Automotive & Mobility Partnerships, Guilllaume Roux, sat down with experts from Volvo Cars and Mobilize Financial Services to discuss how an omnichannel insurance distribution strategy can help drive a smoother customer experience for car manufacturers.

See where you can catch our team onstage next → 

How omnichannel insurance can drive customer loyalty for car manufacturers

In the first part of the panel, the experts discuss the shift in today’s market where car manufacturers have their own motor affinity insurance programs, whether by building their own captive, building their own insurance technology platform or outsourcing to insurtechs.

‘Most car manufacturers have a car insurance offer, but they act only as an intermediary or distributor,’ explains Raphaele Carreau, CEO of Mobilize Insurance at Mobilize Financial Services.

‘One of the challenges they have is customer loyalty beyond the car purchase moment and how to keep the customer within their environment. OEM captives have been serving this purpose with financing solutions and services like maintenance, extended warranties, etc. – what comes now is car insurance.’

When people need their car insurance, they’re in trouble, she explains. This is where OEMs can gain a lot of loyalty points with customers. 

For instance, when someone has an accident and needs to get their car fixed, insurance is a lever for OEMs to ensure that customers will get their maintenance and repairs done within their own car manufacturer network – generating more after-sales.

‘They also want to have more control over their customer experience and to make it better than what it is today,’ Raphaele says.

‘They also want to have more control over their customer experience and to make it better than what it is today.’

Read more: Why Ford, Jaguar Land Rover, others are eyeing embedded insurance →

Key features of omnichannel insurance for car manufacturers

For car manufacturers, an omnichannel insurance program is key as they intend to further develop their direct and digital communication channels with customers. And as customer expectations grow towards a more tailored customer journey, what will that look like?

‘Each OEM is unique. They have their own strategy, brands and customer segment,’ Guillaume explains. ‘So there is no standard, perfect customer experience. It’s up to the OEM to define what fits their values and brand. That being said, all OEMs have the same objective: making sure that customers purchase their insurance and making it super natural for their customers to do so.’

However, he outlines a few ‘guiding principles’ that OEMs can follow when it comes to their motor insurance:

  • Insurance needs to be seamless. From getting a quote to buying a policy, all steps need to be fully embedded into the OEM’s ecosystem.
  • It needs to be omnichannel. This means offering insurance in the OEM’s dealerships, app, website and even a car’s configuration system. ‘We need to leverage all possible distribution channels to push insurance and to do it through multiple touchpoints to target the right customer at the right moment,’ Guillaume explains.
  • Monitor insurance performance data such as the conversion rate and customer journey insights for continuous improvement.

OEMs are starting to take over the tech for their insurance programs, enabling them to be more ambitious when it comes to creating an omnichannel customer experience.

Omnichannel insurance: should car manufacturers build or partner?

Car manufacturers are not new to the world of insurance. But it’s how they offer it that is changing.

Traditionally, OEMs have relied on insurers to provide the tech for their insurance programs. The problem, Guillaume explains, is that motor insurance is traditionally multilocal, with one insurer per market. This has made providing a global customer experience extremely complex.

‘Insurers are not tech companies,’ Guillaume says. ‘The tech they’ve provided lags behind because of their legacy infrastructure. But what’s exciting is that OEMs are starting to take over the tech for that and putting themselves in the driver’s seat when it comes to orchestrating their insurance program. And it really enables them to become much more ambitious when it comes to creating an omnichannel customer experience and product innovation.’

So how do they do that? Car manufacturers can choose to build or partner when it comes to their insurance tech platforms.

But, Guillaume explains, developing their own tech platform in-house is often costly, time consuming and risky.

Collaborating with an insurtech however, means they can outsource the tech and create a unified customer experience – launching in multiple countries within a matter of weeks.

Raphaele says that in addition to evaluating obvious criteria such as cost, time and skills, ‘Car insurance is not a simple industry. Neither are OEMs. So something we really want to look at is the capacity of a potential partner to deal with complex integrations.’

‘If we want to make the customer journey as seamless as we hope for, we need to onboard the after-sales environment, which is complex since it includes dealerships.’

Not to mention making sure that the customer experience is seamless across different countries. ‘Not all partners are able to do that. Surely not traditional insurers, but not all insurtechs either,’ Raphaele says.

Andreas Mathiesen, Head of Insurance Global Commercial Operations at Volvo Cars adds, ‘The success of OEMs varies across different markets. We need to make sure that it’s as simple and intuitive for customers as possible when they buy direct from us. They should also be able to approach markets differently based on how successful a car manufacturer is there.’

‘Regardless of what type of model and whether we build or buy, what is it that we want to achieve? We want to give a superior customer experience over time. So when something happens we want our certified technicians to take care of the car, using our spare parts, and so on.’

OEMs can analyse telematics data to build sophisticated pricing models and give themselves a competitive edge over traditional insurers.

Using telematics data to create more attractive motor insurance

Connected car data is a game changer for car manufacturers, especially in terms of services and the moment a claim is made.

OEMs can not only use this data to make their insurance more appealing than their competitors, but they can also use it, with customer consent, to have what Andreas calls ‘a more proactive customer experience’ by anticipating problems before or as they arise and offering solutions.

‘Differentiating products and pricing is key for OEMs because it can be a way to boost the attractiveness of their products,’ Guillaume says. ‘Telematics is an amazing way to do that because it’s positioning them towards the customer. They have the data, they know the vehicle so they’re the best ones to insure these vehicles. So it’s a very good lever for OEMs to sell more insurance.’

OEMs also have access to more and more claims data, which can help increase the repairability of vehicles and decrease cost of ownership for customers. They can also analyse this data to build sophisticated pricing models and ‘give themselves a competitive advantage over traditional insurers.’

But let’s face it, if pricing is the main factor for many drivers, what advantage do OEMS have?

‘Pricing is a main driver for the motor insurance business, but it’s not 100% valid for affinity programs,’ Guillaume argues. ‘When OEMs push insurance to their customers, it’s not only insurance, it’s also peace of mind. Because the OEM is making sure the insurance product is the best fit for the vehicle sold. If it’s an EV, it’s the right level of coverage.’

Pricing is important, he continues, but as long as it remains at a reasonable threshold, peace of mind is more important.

Raphaele adds, ‘I don’t think it’s a correct assumption that the OEM’s car insurance is more expensive than a traditional one.’ OEMs are willing to subsidise to help with the price. 

They may face some challenges if they aim to carry the risk themselves, however as Raphaele mentioned, ‘they are the best at repairing their vehicles and controlling the cost. And this is a good part of the insurance premium.’

If you want to improve your customer experience with a global, tech-driven insurance program, reach out to our motor team.