Due to the propensity of man to distribute risk, to prevent catastrophic damage to someone’s life because of a minor accident, we have the concept of auto insurance. Auto Insurance reduces the liability someone may have after an accident, to something that’s more easily affordable. This makes easy, convenient access to the Auto Insurance network imperative if customers want quick resolutions and effortless claims.
That’s one of the reasons that customers of auto insurance companies are increasingly demanding the availability of service through apps. However, the demand has not resulted in any increases in supply, with a survey of the top insurers showing that only 28% of them had their services available through an in-house app.
The demand for these apps is not going away any time soon, however, with the Automobile industry increasing in sales YoY, especially with the introduction of electric vehicles.
The growth of the market, coupled with the gig economy, which results in development like ride sharing companies or car sharing services, bring with them new avenues for alternative revenue sources.
In addition, most of these new customers are millennials, who are seeking convenience and ease of use as a priority, as evidenced by the success of companies like Apple, that sell convenience as a product. In a survey of Auto Insurance users by Age, over 60% of respondents who indicated they preferred App based services were millennials, the most important market.
Another thing that is soon to increase the global market is Self Driving and AI cars, which at least for an interim period will see higher premiums as the market adjusts to the new technology and long term actuarial data is gathered.
All of these factors in conjunction with each other point to one thing: The future of Auto Insurance is in Mobile Apps, and insurers who do not get on the train are missing out on a big chunk of business. However, for forward-thinking, innovative entrepreneurs the timing couldn’t be better to enter the market.
Auto Insurance Apps have a few requirements
- • They must be highly accurate, with no errors
- • They require good customer support
- • They must feature comprehensive documentation
- • They must be legally vetted to ensure compliance with data security rules
Due to these stipulations, the cost of development does rise slightly, but is no match for the expected revenue. For a minimum viable product, expect to pay anywhere between 45000 to 65000 USD, with the costs changing depending on your final feature set, and development choices.
You can also choose to be a white-label insurer, selling your app services for use by other, bigger insurers who do not have their own apps. However, ensure that your legal and fiduciary duties are correct to the letter, as federal regulations can spell Doom on companies in non-compliance. At the end of the day, the auto insurance market is ripe for the taking and a great opportunity for the budding entrepreneur, or an experienced player of the markets.