VouchForMe is making progress towards the UK market this year following successful qualitative market research.
The company’s pilot for motor insurance has been tested with its target group of millennials — drivers aged 18 to 44 — in seven days of individual and group discussions about their attitudes to risk, trust, friendship and how these intersect with views about money and buying decisions.
The study, by human insight specialists Further, confirmed clear frustration with present insurance models, notably regarding:
- High premiums — especially for young men
- Sense of arbitrariness/unfairness of cost based on actuarial predictions rather than actual driving behavior
Using the Ethereum blockchain platform as a technology base for transactions, VouchForMe uses a form of peer pressure, or ‘social proof endorsement’, to encourage and sustain better behaviors — such as safer driving — among policyholders.
By accepting only risks that are guaranteed with a financial commitment, such as credit card details from an endorser who knows the driver, VouchForMe enables lower premiums and shared excesses for the insured.
The research study showed that participants were particularly attracted to:
- ‘Personal factors’ determining premiums
- The ‘community spirit’ behind the proposition
- The influence of vouching to encourage safer driving, through drivers wanting to avoid asking others to pay for their share of the excess
Equally, respondents confirmed that:
- VouchForMe’s proposition was, on balance, more appealing within families than among friends
- Most interesting for the 17–24 age group
- 79% of participants would not consider a voluntary excess of more than £500, but might consider a higher level with VouchForMe
- Parents with teens who just start to drive are the group with the highest interest to vouch for their kids
- Those set to benefit most might include inexperienced drivers, students, responsible young men, residents of less safe postcodes, drivers without No Claims Bonuses or even the disabled and long-term ill.
Co-founder Matt Peterman says:
“Research has confirmed our sweet spot as we progress the UK launch. The greatest need and highest potential is among drivers at the intersection of high premiums, low ability to pay and self-perceived good driving skills. Motor insurance is ripe for disruption: it could significantly reduce prices if its model allowed it to operate with lower risk clients. Better still, we have a chance through the responsibility that comes with social proof to make roads much safer in years to come.”
About the UK market
- In 2016, the amount of gross written motor insurance premiums was approximately 20.3 billion euros (Source: Statista.com)
- Insurers’ biggest challenge (or opportunity) is improving operational processes using technology
- This is closely followed by the potential of customer data analytics to improve underwriting, pricing and marketing
- VouchForMe is targeting millennials — these will make up 75% of the workforce by 2023. Virality and social media play a crucial role in their buying decisions
If you haven’t yet tried the VouchForMe Unlimited, there is still a promo freemium period!