Customer-driven providers lead car insurance in 2021

Nisthula Nagarajan
Filed on May 2, 2021 | Last updated on May 2, 2021 at 02.07 pm

Personalisation and transparency are aspects making waves for customer experience in the industry

The relationship between customers and auto insurers has evolved more in the last 10 years than in the last eight decades. As the world's connectivity progresses more every day, the insurance industry has experienced a shift as well. Online quotes, the popularity of self-service, easier access to information, and company reviews have put power in the hands of the customer, now more than ever. The decision-making process is helmed by them, not the insurers.

In the UAE, auto insurance rates reduced in the last year, providing relief to car owners. Rates towards the end of 2020 had a three to five percent difference to what they had been at the beginning for common family models. On bigger four-wheelers, there was a 10 to 12 percent difference in the same period. Social restrictions due to the pandemic have resulted in fewer people on the roads, which has resulted in fewer accidents. Since then, auto insurance is witnessing an upward trend and continues to show competitiveness between local providers. With digitalization at the forefront of the country, aligned with UAE Vision 2021, the insurance industry is joining many others that have rapidly digitized over the last year.

According to J.D. Power 2020 U.S. Auto Insurance Study, insurance company websites surpassed agents in terms of the importance of client interaction and service by providing higher customer satisfaction for the first time in the study's 21-year history. A digital platform outperforming face-to-face agency interaction in customer service is a giant leap forward for the industry. An innovative example of an auto insurance provider who is putting the customer first using digital channels is Beema, one of the fastest-growing InsurTech players in the region. It provides insurance tailored to individual customers' needs through a variety of cover options. It has also developed a user-friendly mobile app and website. Customers can access policy information, get quotations and raise issues and receive a response usually within five minutes. This is not possible in a traditional insurance agent format, where usually the turnaround for all these aspects is, at the very least, a few days.

The power of data

To solve the dilemma 'What do customers want?' collecting and analyzing customer data is vital. With it, insurance companies can move away from the traditional pricing structures for premiums and emphasize customization. It enables a 360-degree view of customers, so the firm is better equipped to offer them the right products at the right time.

With data, Beema can understand its customers' needs and deliver unique and exciting benefits to its customers. For example, it offers Pay-per-kilometer options where customers can earn up to 25 percent cashback on their policy premiums depending on their yearly mileage. All they need to do is send their mileage reading to Beema and if it's less than 20,000 km, they'll receive the corresponding cash back at the end of the year. This year, Beema's cashback average is Dh305 to date.


Bottom line: Disrupt or be disrupted

With these trends, customer experience has become the driving force behind insurance premiums and products. Providers face imminent disruption by new and successful players that have entered the UAE market in 2020, which gives customers new choices, forcing traditional insurers to reconsider their permanent choices from within and outside the industry.

One of the obvious changes is that customers have become accustomed to shopping for a wide variety of products and services over the web, and insurance is no exception.

Another is rising demands for personalized products and services in a progressively connected world and technology that can undo traditional business models.

According to Deloitte's 'Insurer on the brink' report, customer loyalty is no longer a factor. Insurance as an industry does not rank high in customer experience, leaving a gap for new customer-driven providers, who are filling it. With a new tech-savvy generation on the verge of becoming insurance purchasers, it only makes sense that digital offerings and mobile apps are paramount. Ease of use, low cost, and good customer experience are key to gaining and retaining customers. In the age of information, potential buyers are more informed and sophisticated. As prices have become more transparent, customers are open to new propositions based on security, mobility, and different kinds of coverage - and these propositions require new, dynamic pricing structures. Beema is changing the game in this aspect, providing transparency on varied cover options, offering discounts on fuel, car washes, oil changes, and maintenance, along with 24-hour roadside assistance, guaranteed repairs, and round-the-clock service.

In the UAE, Beema is a trusted, verified, and independent insurance company that is in the present. It is a pioneer with regards to the Pay-per-kilometer policy and is the region's first digital car insurance offering. With respect for customer's time and the era of instant gratification, Beema provides a quote within three minutes and only takes five to finalize a purchase. Constantly innovating, the company served over 20,000 customers in its first year alone, gaining one percent of the market share.

Deepu Kesava Panicker, a Beema customer, credits the company's offerings and service. "Living in a world of services, it is very important to understand how qualitative the service we receive is. The benchmark for me is experience and mine with Beema has been very positive. It commits to end-to-end service and responds to requests on time," she says.

Some people are cautious and avoid excess driving when they can, hence creating lesser risk. Such customers benefit the most from a cashback proposition such as Beema's Pay-per-kilometer. Krishnakumar Arangath, who owns several vehicles including five cars, and two motorbikes, says, "With the number of vehicles I own, I deal with insurance policies more often than most people. I took on the task of researching the best one for me. I selected Beema firstly because its pricing is very competitive. Secondly, it goes the extra mile when it comes to customer service. The team is extremely responsive and I've never had an issue with them. Thirdly, there are no other providers who offer so many extra goodies like roadside assistance, referral bonus, and the unique cashback system according to the kilometers you've driven."


With several industries being disrupted this year, insurance providers should listen to their current and potential customers first and then act. As Beema has done, insurance providers need to make significant efforts to take the lead in putting their customers at the core of their business and create/adapt products based on customers' demands. Adjusting to this swiftly developing atmosphere on their own is essential as, otherwise, competitors will dictate how they change.