Every year thousands of new drivers pass their tests, with over 400,000 shedding their L-plates in the UK alone. Once the test is out of the way, they face a new challenge. How will they choose an insurance provider? With no driving history, insurance is out-of-reach for many new drivers, and even for those who can afford it, which insurance provider what differentiates one insurance company from another? Our research in the UK found young drivers are frustrated with the arbitrary model of pricing premiums and are looking for solutions.
Insurance companies face a similar dilemma, and each new driver is an opportunity for a new potential customer. Still, without driving history, it’s impossible to separate the responsible drivers from the reckless. Alternatively, profitable customers, from costly ones? The answer is social proof.
Social Proof is a psychological phenomenon where people change their behavior to mimic the actions of others in certain situations.
To apply it to driving, if you’re the type of person that has friends and family that drive responsibly, you’re more likely to mirror their actions and drive responsibly yourself. At the same time, if your friends proclaim you as a responsible driver, you will try to stand up to this reputation.
VouchForMe is a peer-to-peer insurance product that monetizes the trust between close friends and family through vouching. When someone vouches for a driver, they are confirming they trust them to drive responsibly, and to ensure these endorsements are accurate, vouching will be backed up with a financial guarantee.
Meaning that if someone makes an insurance claim, then their guarantor will cover a pre-agreed part of the deductible, allowing VouchForMe users to take the highest insurance deductible accessing the largest discounts. Additionally, this creates a psychological bond of trust, encouraging safer driving, as users know that their friends’ money is on the line.
We’ve built partnerships with insurance companies in Slovenia and Romania, and we’ve found our model both reduces small claims and the frequency of claims. Making it a profitable product for insurance companies.
Our model can be implemented quickly and up-and-running in just three months.
Download our white paper here. To see how you can increase profits, stand out from competitors and attract responsible drivers to your brand.