No seriously, I'm asking. While I often prognosticate about the future, this one has me thinking real hard. I have some ideas. I need the full picture. I think before I speak.
So what are my preliminary thoughts?
There are changes coming, and technology is at the forefront.
Cell Phones vs. Driving
With all the talk about the dangers of texting, and driving teens are being more careful. How you may ask? They are choosing texting OVER driving. I remember being 16 years old and begging for a car. Everyone I knew wanted one. We wanted to drive to attend social events. (Full disclosure, I had a cell phone at the time too. Just that, a phone. No texting. No smartphone. I had no distractions when I drove.)
Fast forward to today. Kids can socialize though a myriad of apps. In fact, according to a Pew Research study, three out of four Millennials would rather have a cell phone than a car. I know parents with kids of driving age who have chosen a cell phone over a car and a driver's license. All have said they can wait until they get out of college to start driving.
Then how are they getting around without licenses and cars? There is always public transportation and friends. They can ride a bus, train or subway around and tap away on their phones without risk of a crash. But, the state of public transportation in many cities (including here in Dallas) is abysmal. What then?
Technology saves the day for the driverless. With apps such as Uber and Lyft people can get around cities easier than ever. These apps have made it easy to get a ride from point A and B without the hassle of a taxi. With rides anywhere literally at your fingertips, public transportation is no longer an issue.
While ride sharing apps have come under recent scrutiny for security and licensing reasons, I think they are here to stay. Traditional cab and taxi services are starting to embrace this new technology.
There have been many debates about the impact of ride sharing to the modern insurance agency. Should they have a commercial policy or does a personal policy cover the driver? That is one concern. Here is another. How does ride sharing impact drunk driving rates? When it is three taps on your cell phone to get a reasonably priced ride home, why not? Many companies pay for free rides after a business social event like a holiday party. Many friends of mine use Uber as a backup plan after a late night out. Most of the drivers will agree with that trend. I have talked to quite a few drivers about it. They think the real reason municipalities are cracking down is lost revenue from driving while intoxicated citations.
Why not just take the driver out of it altogether? This removes one of the concerns of ride sharing... rider safety at the hands of the driver. Now you can call an automated car to take you to any point on the map, all within the reach of your smart phone. This segment is growing with Google, Toyota, BMW, Ford, Tesla and others jumping into the driverless vehicle craze. We might even see dedicated lanes for driverless cars so they can zip around at highway speeds within mere inches of each other.
Cars are getting safer. A 2013 study by the National Highway Traffic Safety Administration (NHTSA) found that compared to a new model vehicle (0-3 years old) you were 10% more likely to receive fatal injuries in a car that was 4-7 years old. The numbers get worse from there. Vehicles 8-11 years old were 19% more likely; 12-14 years old, 32%; and 15-17 years old, 50%. For vehicles that are 18 years or older, it increased to 71%.
The improvements have come from stronger frames, better restraints and systems that sense or prevent an accident. This could decrease the cost of claims, which could further lower premiums.
Usage Based Insurance
While I'm at it, I might as well go ahead and throw in insurance based on how often and in what manner you drive. Some carriers have a sensor you plug in. What happens when you can tie it to an app? You can bet someone is already working on it.
I have outlined a few of the factors that will influence not only how you quote and sell auto insurance to the new generation of drivers, but also how you market it. It is a brave new world with new players making a splash. Are you ready?
I think we have a good direction on how we can help today's agent grow in the new landscape. Keep tuned as we go at this together. In the meantime, what are your thoughts? Leave them in the comments below.
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