Auto insurance from a customer's perspective

[whatyouwantfinally]

The problem is its not a thing I can build, but a business concept, and not a new one at that. The auto insurance industry is huge, complex and set in their ways, to say nothing of well entrenched politically. The concept is a destructive one requiring multi-billion$ industries to rewire what they do now. Not going to happen. The easiest path for a state farm, etc is to ignore new business ideas or silence me by whatever means (fill in the blank here). I have no backing at this point. I figure the only sensible way for me to get a new policy out there is to somehow partner with a very small company. I would still need a sizable block of cash to make that happen.

The concept I have is much better, would be profitable and would be accepted by the public. Who wouldn't want to cut their ins costs by 30% as long as the company is legitimate? RIght now its just words in the wind, and not much more until I can create some interest among those who have money and are not happy with the status quo.
Thanks for the positive comment!

You know carriers already offer low annual mileage discounts, right?

 

[fed up]

Get the MileWise from Allstate. It offers a base which is low, and charges per mile driven. Their money pool to pay claims comes from ALL of their other policies. What good is your idea when YOUR company is bankrupt?

 

[Allen Trent]

The problem is its not a thing I can build, but a business concept, and not a new one at that. The auto insurance industry is huge, complex and set in their ways, to say nothing of well entrenched politically. The concept is a destructive one requiring multi-billion$ industries to rewire what they do now. Not going to happen. The easiest path for a state farm, etc is to ignore new business ideas or silence me by whatever means (fill in the blank here). I have no backing at this point. I figure the only sensible way for me to get a new policy out there is to somehow partner with a very small company. I would still need a sizable block of cash to make that happen.

The concept I have is much better, would be profitable and would be accepted by the public. Who wouldn't want to cut their ins costs by 30% as long as the company is legitimate? RIght now its just words in the wind, and not much more until I can create some interest among those who have money and are not happy with the status quo.
Thanks for the positive comment!

While that all may be true,the regulations in most states require you to insure everyone & all comers & not redline. Being by the mile only that requires tech to be attached would likely not be approved in most states as it would be seen as a discriminatory practices that adversely impacts minorities & the poor to a greater extent.

There is so much competition in the auto insurance industry already that you inference that there is collusion to substantiate high rates is not valid. To the contrary, most average size or regional carriers would say that the big players are pricing so aggressively that the small & regional cannot compete to make a profit

 

[Matt37]

While that all may be true,the regulations in most states require you to insure everyone & all comers & not redline. Being by the mile only that requires tech to be attached would likely not be approved in most states as it would be seen as a discriminatory practices that adversely impacts minorities & the poor to a greater extent.

There is so much competition in the auto insurance industry already that you inference that there is collusion to substantiate high rates is not valid. To the contrary, most average size or regional carriers would say that the big players are pricing so aggressively that the small & regional cannot compete to make a profit

exactly - if anything insurance carriers make themselves unprofitable through competition. (See FL property market)


this guy reminds me of the insuretech guys - with massive tech knowledge, but not an inch of insurance knowledge as they burn through capital investors money on books of business running massive combined ratios.


I like engineers - I know a lot of them, but sometimes their imaginations get the best of them.

It's all fun and games until the losses pile up and you get your ass handed to you....... seen it over and over and over again in my 30 years in industry.

 

[Markthebroker]

exactly - if anything insurance carriers make themselves unprofitable through competition. (See FL property market)


this guy reminds me of the insuretech guys - with massive tech knowledge, but not an inch of insurance knowledge as they burn through capital investors money on books of business running massive combined ratios.


I like engineers - I know a lot of them, but sometimes their imaginations get the best of them.

It's all fun and games until the losses pile up and you get your ass handed to you....... seen it over and over and over again in my 30 years in industry.

Oh yeah, that actually reminds me of two carriers that came here from South Korea about 8 years ago or so. Dongbu Insurance, and LIG, a division of LG electronics. Yes, the one that makes cell phones, computer monitors, and washing machines. They felt they had figured out the market, and they were going to show us silly Americans how it was done. They came in and undercut everyone. I wrote some policies with them, and one of the veteran agents kept telling me that it wouldn't end well. He was right. I was a new agent at the time, so it was still worth it for me, but both the carriers had to jack up their rates and cancel a bunch of markets, and I had to move them to other carriers. Basically, yes, they had their asses handed to them when they got hit with losses.

 

[JoshE]

@northwoods2 You might be up to something.... Who would of thought that Lemonade or Hippo could be making money with low rates and adding value to consumers? Now all you need is a couple of million dollars and you're all set, good luck and get to raising some capital!!!

Elon Musk and Warren Buffett are both in the auto insurance game. Two of the richest people on earth, and debatably two of the most successful business minds on earth.

Show them how they are doing it wrong, and you can do it better. These are brilliant business minds, so of course they'll see how you are right. Collect your two or three billion dollar consulting fee, and buy us all beer.

They got money that's their ONLY competitive advantage in the insurance industry, they are not that business savvy in my opinion...
Elon probably will lose his ass on the insurance business, he is simply vertical into it because NO ONE will insure those autonomous vehicles/taxis he is hinting to be making with his Tesla software updates (especially not at a low price with no statistically significant data)...

Warren on the other hand is just an old school robber barons era type individual, he uses the float (insurance premium) of his insurance businesses to pump into his Berkshire Hathaway nothing smart about it just very effective cunning strategy. In other words, Warren figured he could make a lot higher return with millions from that juicy insurance premium float than he could from all of us giving him our investment capital.

 

[Markthebroker]

Well, they were smart enough to outsmart plenty of people on the way up, and amass fortunes.

Elon Musk's iq has been estimated at 155, putting him in the 99.96 percentile. His iq is generally accepted at genius level.

As far as Buffet, Forbes said "Warren Buffett is one of the great all-time investing geniuses"

What I'm getting at, is the OP is going to have to outsmart both these guys.

 

[fed up]

My "company" does not exist. Allstate pulls the same stunts. One of the worst ins cos out there.

Allstate MAY be but your stupendous idea is alive and well in their MileWise program. Now pull in your professor whiskers and go find another industry to bash

 

[Allen Trent]

6,000 insurance carriers & they are all colluding to overcharge. If it was like most other industries (think big Box Walmart, Home Depot), the big ones would institute the super cheap rate ideas to eliminate all the competition. The big difference is insurance is a heavily regulated industry & is required to insure everyone & isnt in control of setting its own rate or implementing new ideas. They have to 1st sell regulators on how it helps consumers from all walks of life be protected for a reasonable rate.

I would love to see income taxes be based on how much i use government services as I pay at about 30% federal on my final dollars while 47% of our population pays in 0 federal taxes & some actually receive money back even though they paid zero in. Auto insurance has some of these same components.

 

[Matt37]

@northwoods2 You might be up to something.... Who would of thought that Lemonade or Hippo could be making money with low rates and adding value to consumers? Now all you need is a couple of million dollars and you're all set, good luck and get to raising some capital!!!



They got money that's their ONLY competitive advantage in the insurance industry, they are not that business savvy in my opinion...
Elon probably will lose his ass on the insurance business, he is simply vertical into it because NO ONE will insure those autonomous vehicles/taxis he is hinting to be making with his Tesla software updates (especially not at a low price with no statistically significant data)...

Warren on the other hand is just an old school robber barons era type individual, he uses the float (insurance premium) of his insurance businesses to pump into his Berkshire Hathaway nothing smart about it just very effective cunning strategy. In other words, Warren figured he could make a lot higher return with millions from that juicy insurance premium float than he could from all of us giving him our investment capital.

Lemonade is a great example - right now it is going great with the hype, but they also are not playing with their own money, and rather $400M+ in seed funding for their project.

I hope they prove me wrong - but I see a crash and burn eventually.

Lemonade is promoting "Super fast service and SAME DAY CLAIMS SETTLEMENT" … What could go wrong?? The personal injury attorneys are already foaming at the mouth.