Today, car insurance is gradually becoming increasingly important and necessary. Every car owner needs to carefully study the specificity of auto insurance, as well as compare car insurance quotes online before deciding on a company and type of insurance. This will provide him with a number of perspectives.
In this article, you will find useful information on the role of innovation in auto insurance.
Characteristics of Innovations in Car Insurance
In the scientific literature, innovation is understood as ideas and proposals that can be the basis for creating new products or significantly improve the consumer characteristics (technical, economic, etc.) of existing goods, creating new processes, services, or anything that can improve the ‘quality of life’ of mankind; the new idea must be put into practice.
Innovations have certain characteristics in car insurance, which are distinguished by the specifics of the insurance business and the uniqueness of the insurance product. They include:
- Lack of patenting, which allows insurers to easily implement effective and proven solutions, ideas, technologies, borrowed from other participants in the insurance market;
- Insensitivity, inseparability, and risk: the policyholder receives the service only in the event of a certain unforeseen event;
- Non-belonging to essential services, which encourages insurers to seek flexible approaches to potential consumers and offer insurance services that meet the needs of a wide range of policyholders;
- High social orientation: insurance provides reliable protection of property rights of the population and economic interests of the state.
Under these conditions, car insurance innovations are a process or result, the implementation of which in practice makes qualitative changes in the insurer’s activities in the form of new insurance products, improving the interaction with the external environment, expanding approaches to attracting new policyholders and improving internal business processes.
Types of Innovations in Car Insurance
Depending on the object of innovation in insurance activities, there are marketing, product, process, and organizational innovations:
- Marketing innovations in car insurance concern new sales channels. Today, such a sales channel is the online sale of insurance products, which allows the insured to draw up a contract online, choose the functions that belong to him and pay insurance premiums;
- Product innovations are represented mainly in voluntary property insurance. In addition to the traditional risks (theft, damage due to an accident, destruction of vehicles, etc.), which are covered by contracts of this type of insurance, insurers may additionally offer: evacuation of the vehicle from the scene of the accident; simplification of documentary evidence of an accident; technical assistance on the road, etc.;
- Process and organizational innovations consist of the introduction by insurers of automated business process management systems.
Summing up all of the above, we should note that today much attention is paid to innovative information technologies in the field of car insurance. And not in vain, because it contributes to increasing financial inclusiveness, which provides for a maximum consideration of the interests of the most vulnerable categories of the population in the context of ensuring their access to quality and safe insurance services.