UK insurtech Flock’s newest substantial funding highlights the significance of tailor-made motor insurance policies and decreasing to decrease premiums. Utilization-based insurance coverage (UBI) insurance policies have grown in recognition as insurtech corporations resembling ZEGO and Flock use this market to succeed in out to extra prospects. As a way to higher handle their budgets and enhance the protection of their drivers, SMEs wish to decrease premiums by buying UBI insurance policies. Flock supplies real-time details about driving habits utilizing telematics. Cautious driving is rewarded, which advantages each the shopper and the insurer by decreasing the variety of premiums and claims.
Cheaper premiums are thought-about by 26.4% of SMEs to be crucial facet of a UBI industrial car coverage, in keeping with GlobalData’s 2022 UK SME Insurance coverage Survey. The second-most essential facet, in keeping with SMEs, is enhancing car and driver security measures (20.5%). Decrease premiums are advantageous since they decrease prices for the enterprise, particularly now, when cash is brief as a result of disruption of the financial system. In response to a follow-up query about what would should be supplied to entice them to affix, 34.3% of SMEs said saving 20% on premiums. This demonstrates that many SMEs want decrease premiums and that the usage of UBI insurance policies will assist insurers broaden their pool of potential prospects.
Flock has raised £31.5m in Sequence B funding in February 2023, which can be used to broaden into new markets and broaden the scale of its engineering and knowledge science groups. This fundraising spherical defies the final downward development in insurtech funding, probably suggesting that such investments haven’t come to a standstill.
Particularly in a time when funds are restricted, insurers who’ve taken the hassle to supply UBI merchandise are higher positioned to revenue from shopper knowledge by providing larger levels of personalisation and suppleness. The benefits of UBI within the type of decrease premiums will retain prospects and supply alternatives to draw new ones. As a way to assist SMEs reduce bills, insurers ought to proceed to search out methods to supply decrease premiums whereas nonetheless selling environment friendly driving.