RAC launches in-house insurance intermediary
The RAC has launched its own inhouse intermediary as part of a strategy to achieve GWP targets. Reports suggest RAC Insurance plans to exceed £300m GWP by 2023.
Already, RAC’s foray into the insurance market has proved fruitful, with more than 650,000 in-force policies in 2020. The company’s core car insurance product currently handles more than £200m GWP.
The news follows on from the RAC’s announcement last month that it plans to provide a new pay-by-mile service to its customers. The new insurance intermediary’s telematics product has been available since 30 March. Van and home insurance products are scheduled to follow in quarter two of this 2021.
Currently, RAC Insurance offers a range of motor insurance policies that include car, multi-car, learner, classic car, motorbike and van cover. It also provides other insurance products such as home, travel and business policies.
RAC technology partner
The new brokerage has appointed CDL as its technology provider while Europa Group will provide policy administration services and an RAC-branded contact centre.
Speaking about the latest initiative, Marcus Latchford, head of RAC Insurance, said the development “represents a material shift in our insurance strategy” following the business successfully running “a fully outsourced insurance operating model for many years”.
He continued, “By setting up our own broker and taking direct control of key parts of the value chain, we now have far greater ability to differentiate our propositions and pricing to unlock the significant growth potential we see for RAC in these markets. Innovation in pricing and data are central to our plans for the new broker.”
Latchford said RACs services would be offering its users a raft of benefits. He explained, “By developing our own pricing models and working directly with insurer partners, we’re able to utilise the RAC’s wealth of unique data assets to improve risk selection and offer customers much more competitive prices.
“We will also benefit from a digital-first operating ethos with simpler, more intuitive journeys that are optimised for customers purchasing online and via the aggregator channel, as well as a new self-service centre enabling customers to better manage their policies online.”
CDL’s chief executive Nigel Phillips said the partnership with RAC prese nted the technology company with the opportunity to support RAC’s development. “CDL’s investment in game-changing platforms for data insight, product personalisation and customer engagement, combined with our track record in supporting high volume retail operations, means that our insurance ecosystem offers the perfect fit for the RAC as it targets growth.
He continued, “We’re delighted to be working with such a long-standing brand that has constantly evolved to meet developing consumer expectations.”
Jonathan Dixon, Europa’s commercial director, added: “It’s a great accolade to the skill s of our people and our operational excellence that Europa has been selected to be the RAC’s administrative partner.
“Being responsible for the RAC’s customers is a huge endorsement of our capabilities. We are committed to making this a long and very successful relationship.”
TrueMotion insurtech acquired by Cambridge Mobile Telematics
One of the world’s leading telematics insurtechs, Cambridge Mobile Telematics, was launched in 2010 and powers 65 enterprise programmes in 28 countries.
Meanwhile, TrueMotion, which launched in 2012, has enjoyed significant success as a telematics operator, raising US$10mn in its seed funding round in 2010, and then partnering with the motor insurtech Noblr in 2019.
TrueMotion has also entered the European market, collaborating with LB Forsikring to promote safe driving in Denmark.
The joining of the companies means TrueMotion’s 150-strong workforce will join Cambridge Mobile Telematic’s already established team, along with their client list, which includes Travelers, Farmers, and Progressive.
The new company will focus on increased interest in using telematics for crash reconstruction in personal lines claims and more innovation in the telematics space.
Speaking about the acquisition, William Powers, CEO, and co-founder of Cambridge Mobile Telematics, described the move as an opportunity to explore new markets, expand throughout the US and bring telematics to a much wider customer base.
"With this acquisition, we will use our world-class talent, technology, and scale to help our partners overcome the complex challenges of global road safety,” he added.
Ryan McMahon, VP of insurance and customer affairs for Cambridge Mobile Telematics, explained that expanding the company with additional talent and customers would help meet the demands of a growing telematics market. He also quoted data from a study by J.D. Power which revealed that personal auto telematics users have doubled in five years to 16% of policyholders.
McMahon told the press, “This market is rapidly expanding, and building more capabilities is more important than ever,” McMahon says. “Both companies follow similar philosophies and grew up in similar ecosystems, and now we’re bringing those cultures together.”
He continued, “Telematics is absolutely the future of commercial auto and rideshare, and it’s kind of a step up beyond the normal telematics."
McMahon added, “We will not only widen our lead in smartphone telematics, but also use our combined talent to invent new products for risk measurement, contextual telematics, and crash mitigation across emerging mobile, IoT, connected-car, video, and sensing technologies.”
Five reasons why telematics is in demand
- It reduces fuel costs and increases operational efficiency. This is a consideration for most commercial fleets given the rising costs of fuel
- The technology enables fleet managers to plan operations with greater precision by providing exact locations, timescales, and speeds of vehicles.
- It improves driving standards and monitors driver behaviour, reducing detours and ensuring responsible driving.
- It helps fleet health and maintenance by monitoring the health of operational vehicles.
- It increases corporate social responsibility in terms of care for the driver, the vehicle, the impact of driving in terms of emissions, and also the security of the vehicle itself.
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