By Paul Heybourne, Aviva’s Head of Innovation
Mention the ‘sharing economy’ and you might think of home-sharing, food delivery services or even Peter Kay’s popular sitcom Car Share. Being able to grab a seat in someone else’s commute is an increasingly popular way to save hundreds of pounds a year.
And, just like making money from a spare bedroom, or finding someone to build your flatpack cabinet, it’s helped by a range of apps and websites.
Technology is both enabling and driving this shift and, as head of innovation at Aviva, it’s part of my role to make sure we adapt, evolve and make the best use of this technology and to make life easier in terms of insurance.
Suppose, for example, having just bought a car, you want to get insurance just for a few days to drive it off the forecourt before shopping around for annual cover that meets your needs.
Alternatively, what if you could borrow a friend’s van to help your children move house but need insurance for just half a day?
Or, imagine you’re a passenger on a long motorway journey when the driver starts to feel ill. You could take over and drive the rest of the way – it’s only an hour more to get home – but you’re not on the driver’s insurance. What can you do?
Fortunately, there is a simple solution for all these real-life scenarios – temporary car insurance.
We offer short-term car insurance policies for as little as one hour, giving you vital peace of mind, potentially saving you money and hassle. It fits perfectly with our increasingly on-demand culture and is as easy as ordering a taxi or streaming your favourite film.
Micro segments of time
We must evolve our products in this way because car ownership, particularly in places like large cities, is declining.
The average age people start driving is now 26 , meaning people are buying their first car later in life.
What’s more, for those of us with annual car insurance, statistics suggest that the average car is parked at home for 80% of the time, parked elsewhere for 16% of the time and is on the move for just 4% of the time 1.
For many car owners, the maths just doesn’t add up. Many are finding that it’s not economically viable to own a car and the temporary use of vehicles is increasing all the time.
When allied to a mobile, connected generation, the traditional model of car insurance needs to change. People now need cover for micro-segments of time as well as the traditional offer of annual premiums.
We believe that a mix of economic, technological and climate factors will continue to see car ownership decline in the coming years. Unless you need constant access to a vehicle, it will make more sense to rent them as and when you need them, and so our insurance models will need to adapt.
The future could be about ‘in-the-moment’ purchases, as and when you need them, and car insurance will be no different. We already find with our temporary motor insurance product that people typically want their cover to start within the next two hours.
It’s a ‘right-here, right-now’ in-the-moment purchase and with us, you’re covered immediately; comprehensive comes as standard and, if you make a claim, it won't affect your no claims discount on your main car policy.
We’re seeing demand for this type insurance grow by 20% year on year – with clear spikes during the holidays when students return home – and we’ve made things even easier for you by making the product available in the MyAviva app.
The days of having to phone up your insurance company and be charged for a whole day’s insurance, even if you only wanted to borrow a car for an hour, have gone.