How does VouchForMe work in real life?
As we approach the final quarter of the year and slowly start to peak over the fence to see what 2020 will bring, we are proud to say that we have implemented two pilot projects in partnership with the insurance carriers and an affinity group. All parties involved recognized the potential and value of the social proof and brought great enthusiasm and innovative spirit to the project. Slovenian and Romanian partners proved that the insurance industry is very much ready to bring novel ideas to the market that serve the best interest of their clients and helps make roads safer.
The basic concept of the VouchForMe platform is social proof. We describe social proof as the psychological phenomenon in which people are influenced in their decisions and actions by mirroring other people or social groups. If we translate this into our app this means that we enable the insurance client to gather guarantees from her/his social network which states that they vouch for the person’s behavior for the particular insurance case. When we say behavior we mean driving behavior and the insurance case is car insurance. The collected guarantees operate as the insurance client’s deductible, guaranteed by the third person — guarantor. The insurance deductible is the amount of money you will pay in an insurance claim before the insurance coverage kicks in.
When developing the product for both projects, Slovenian and Romanian, we decided to test two different setups. Based on our market research data and close cooperation with our partners we saw there is a need for a bit of differentiation between the Slovene and Romanian cases. We will describe both processes in detail. Today, let’s deep dive into the one available to the insurance clients of the Euroins Romania.
The policyholder, let’s call him Peter, buys casco insurance that includes a higher (than usual) deductible from the Euroins agent. Since he is prepared to bear more risk himself by deciding for a higher deductible, the insurance company offers him up to 45% discount on the insurance premium.
As he buys the policy he automatically becomes the user on the VouchForMe platform and has the option to invite his friends and family members to vouch for him in the form of a financial guarantee.
They can choose the amount that is less than or equal to the deductible amount.
This way Peter basically offloads his deductible and the risk he is exposed to. The sent invitations are valid and open for vouching for 15 days. During this period, Peter’s friends and family can vouch. When and if they do, the guarantees are activated in 15 days or at the time when the full amount of the deductible is achieved with guarantees.
At the time of the activation of guarantees, the legal contract is formed between the policyholder and each guarantor individually. Each guarantor is liable up to the amount which he/she agreed upon. In the case of a claim, which needs to be approved and settled by Euroins insurance company first, the policyholder has the option to use the VouchForMe platform for collecting vouched amounts and herewith covers the deductible or at least part of it.
Next week we’ll present another way of how the vouching and the social proof works in Slovenia. Stay tuned and check our other social media profiles until then!
