State Farm’s HiRoad offers direct to consumer motor insurance

To meet the changing needs of today’s consumers, State Farm is moving towards a multi-channel distribution model which will involve integrating the capabilities of State Farm’s InsurTech investments in addition to co-coordinating State Farm’s offline distribution methods with its online lead generation activites. One example of this is HiRoad Assurance, a wholly owned subsidiary of State Farm which has just received a further US $10m to test advanced insurance and technology concepts.

Currently, HiRoad’s product range includes auto insurance but State Farm plans to extend this to home and travel insurance during 2018.

Furthermore, HiRoad is initially being tested out at Rhode Island – where State Farm does not have captive agents and a relatively low premium income for State Farm relative to other US states. This means Rhode Island is a most able to demonstrate the ability of HiRoad to deliver marketshare and commercial results for State Farm through its digital approach.

The next 12-18 months are expected to be crucial with tests focused on –

1. Automation to increase the speed of policy issuance and reduced costs

2. A self-service model for small claims which will help reduce operational costs

3. Independent technology, data and product solutions which have less reliance on legacy systems/processes

4. Mobile and online brand positioning.

Additionally, HiRoad is also working with local nonprofits to help build awareness around insurance.

How it works?

The user simply has to install the HiRoad app, drive, drive well and save. Every month the driver gets a fresh start, which helps them to control and slash bills.

                  The user simply has to install the HiRoad app, drive, drive well and save

Benefits to customers

1. Enhanced customer experience
2. Real-time accessibility
3. Transparency
4. Saves time and cost
5. Simple and user-friendly

Benefits to insurers

1. Reduced operational costs
2. Increased processing speed
3. Transparency
4. Increased customer engagement
5. Less dependency on legacy systems/processes
6. Improved customer engagement with better insights
7. Improved branding

Traditionally, insurers have relied on car dealerships, agents and telemarketing to distribute car insurance. Now with changing customer needs, insurers are looking for ways to adapt. State Farm’s HiRoad direct-to-consumer business model (D2C), if successful, will be a true disruptor for traditional insurance distribution models. The business model is expected to reduce premiums, automate the end-to-end policy process, and improve the customer experience.

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HiRoad