Flexi Car Insurance
A new product, that allows members to pay per driven kilometre for their car insurance. RAC are looking to future proof their car insurance offering and be prepared for disruption from nimble competitors and car manufactures.
I designed high fidelity concepts, including a pricing structure that was used to present to the executive team and has now progressed into development.
The concept was tested with 849 RAC members.
Trial To Calculate Kms
Many members told us they have no idea how many kms they drive each month, so wouldn't know which price option to select. I added a 1 month trial period which, help the user get an indication of how far they drive in a month. Based on their trial month the app would suggest a suitable pricing option.
Simple Pricing - Like a Phone Plan
Members are skeptical about how insurance prices are calculated and some were concerned that this product would potentially cost them more. After trying many different ways to structure the pricing, I landed on structuring it similar to a phone plan, as people are familiar with that experience. It's made up of a base cost (fixed variables that don't change, eg address) and a KM range (eg 0-500km). By structuring the experience this way it's far more personalised and transparent than RAC members had ever seen before.
Taking The Top Up Pain Away
Members said they prefer minimal contact with RAC when it comes to pricing. Setting a fee and forgetting about it until the following year, suits them. So in order to minimise the pain point of hitting their km range limit before the month ends, rather then getting the member to top-up, the app sends a message to advise the user that they will automatically be rolled up into the next plan option for the remainder of the month, at a cheaper per/km rate.
Show The Savings
As some members were concerned about being charged more for insurance using this product, showing how much they can save each month is critical to the ongoing success of the product. Every month the user will get a summary to show how many kms they used in their plan and how much they saved.
The insurance team are continuing to develop this concept from a pricing, risk and regulatory perspective. They are also exploring ways to introduce it to the market which could take 18 months - 2 years.