DISRUPTING MARKET FOR CAR INSURANCE

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 Business Model for Insurance Industry
KEY PARTNERS KEY ACTIVITIES CUSTOMER CUSTOMER SEGMENTS
VALUE PROPOSITION
• Underwriting RELATIONSHIP
• Agents • Sales and marketing • Reduction of risk in case • Home owners
• Reward “safe drivers” –
• Sales forces • Administration of any insured damage • Car owners
lower premiums + no-
• Brokers • Insurance contract • Reduce burden of • Vans
claims bonus
• Financial advisors servicing sudden high repair cost • Motor bikes
• Direct sales by
• Bank networks • Legal activities • Risk free driving • Travellers
telephone, email or web
• Underwriters • Claim processing experience • Health and Life
services
• IT providers • Re-investing of float • Quick and easy access • Learner and students
• Sales and marketing • Supply management to insurance Saving
experts • Price comparison and IT from federal tickets
services
CHANNELS
KEY RESOURCES • Workplace outlets
• Suppliers • Car dealers
• Insurance agents • Store outlets
• In-house lawyers • Telephone/mail/internet

COST STRUCTURE REVENUE STREAMS

• Claims costs • Sales of ancillary services

• Expenses • Premium charges
• Employee salaries (Underwriters, Agents, Sales, Legal, IT) • Brokers’ fees – 11% to 15% of premium
• Resource costs • Re-investment of float
• IT costs (Server costs)

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 Business Model
KEY PARTNERS KEY ACTIVITIES CUSTOMER CUSTOMER SEGMENTS
VALUE PROPOSITION
• Verify user identities RELATIONSHIP
• Financial Conduct • Record motor insurance • To build a community of • Users wanting to borrow
• Drive Home Insurance
Authority – database of users car insurance users cars at extremely short
• Offered range of prices –
authorised & • Drive home insurance providing best customer notice
based on location, peak
regulated Cuvva • Process claims experience • Users seeking insurance
hours, weather
• Underwriters – • Stored policy documents • Cuvva for shares – for few hours to 28 days
• Emailed policy
Mulsane, for 7 years providing them • Users aged >= 19 years
document
Collingwood • Partnerships to increase insurance by hours • Vehicle owners with cars
• Phone service
• Swiss Re their reach through the app in just aged <= 15 years
• Referrals codes
• Govt. API interaction a few clicks • Users wanting to share
• Price-comparison KEY RESOURCES
• Cuvva for owners – CHANNELS driving long trips
websites facilitating them
• Underwriters platform to earn for • Social Media – Facebook,
• Insurance and claims renting cars Twitter, Blog, LinkedIn
• Cuvva App • Word-of-mouth
• Affiliations with Price- • Cuvva App, Social Garage
comparison websites • Phone

COST STRUCTURE REVENUE STREAMS

• Staff salaries • Selling insurance to car owners – flat monthly fee of £20 to £30
• App development & management • Extra charge to drive the car - £1.20 an hour and up, depending on risk
• Social Media cost • 20% policy premiums for insurance sold through app
• 10% to 30% commissions from underwriters

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 Distinguishing factors Target Customer
Segments
• Pay-as-you-go model where insurance amount depended on
the hours of usage Cuvva can target young consumer segment,

• CUVVA described itself as an independent insurance especially millennials, who often prefer to carry out
intermediary and acted as a sole mediator between transactions on their mobile devices.
customer & Underwriter
Occasional drivers who prefer borrowing vehicles
• Cuvva had their own software platform which integrated the for short duration instead of buying them. Also
three services - brokerage, software house and price
those who want to rent out their idle cars.
comparison, allowing complete flexibility to write risks on
any level

• Rather than traditional marketing, Cuvva acquired customers

mostly through word-of-mouth promotions

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 How Admiral can Respond
Scale Advantage of Admiral Learn from Products At Use in Scale Learn from Customers using
Ecosystem Admiral should learn from its products at Complementary Products
Admiral should tap into the scale use in scale to glean early warning signs. Admiral should learn from its customers
advantage of its ecosystem by improving For example, if trends such as the past who use complementary products to
its brand image and increasing its market decrease in young drivers in its portfolio proactively improve key features. It can
share. This can be done by launching a can be detected, analyzed and rectified in collaborate with digital payment apps,
new integrated website, instead of the early stages itself, they can be avoided hotels providing car rental services to
multiple regional insurance brands, with a from causing decline in market share, capture new segments and further
revamped image which also targets young profits etc. such as the drop in tailor its services according to customer
drivers. A similar approach should be underwriting profits to £11mn in 2016. needs and preferences.
taken for the Admiral app.

Leverage Pricing Data from its Price Learn from Experimentation Offer One Stop Solution for
Comparison Websites through Data and Analytics Customers
Admiral should use the pricing data from Admiral can gather insights on its users Admiral can take advantage of its
its price comparison websites like through user navigation data and consumer insights to display relevant
Confused.com and Rastreator to gather analytics, in a method similar to giants like tailormade ads for consumers for
insights on the prices offered by its Facebook and Google. It can experiment complementary services like car
competitors. This can be utilized to offer with this data to improve the website and maintenance, nearby garages and
competitive pricing and gain back its lost app design, functionality, content etc. for repair shops etc. which can generate
market share among young drivers, who both its insurance and price comparison additional ad revenue.
generally have lower budgets. websites to increase traffic.

This study source was downloaded by 100000850231788 from CourseHero.com on 10-26-2022 07:37:22 GMT -05:00
 This study source was downloaded by 100000850231788 from CourseHero.com on 10-26-2022 07:37:22 GMT -05:00
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