Automotive Agency Model and the insurance opportunities

One of the multi-billion questions raging within the automotive sector at the moment is whether the automobile manufacturers should stick with the traditional method of working with franchised dealerships, or do they shift to work with those same dealerships on the basis of a new agency model?
Automotive Agency Model

A number of factors are converging to call the traditional franchised dealership model into question. Not only have we seen the emergence of independent intermediaries for new cars (eg Autotrader and Carwow), but also we see some of the new breed of automobile manufacturers (eg Tesla, Polestar) operate on the basis of direct sales to customers. The major automobile manufacturers need to therefore make some strategic decisions. Stick with the traditional franchised dealership model or move to some form of new distribution model, such as the agency model? The key differences between the two being:

Franchised dealership model

  • The retail price of the vehicle is set by the dealer, so haggling is possible
  • Sale contract is between dealer and the customer
  • Stock is owned by the dealer
  • Dealers can discount cars by giving away some of their margin

Agency model

  • The retail price of the vehicle is set by the manufacturer, so there is no haggling
  • Sale contract is between the brand and the customer
  • Stock is owned by the manufacturer
  • Dealers cannot discount cars by giving away any of the manufacturers margin

While there are many financial drivers for the move to an agency model, both for the automobile manufacturer and for the dealers, a key driver for the former is that the nature of a new direct communication channel with customers enables much greater use of new customer insights that become available along the whole sales funnel. Furthermore in the traditional sales model, sales promotions were mainly reactive, whereas the agency model allows for optimised promotions throughout the entire customer lifecycle. Additional product and service sales will grow, as upselling potential enabled by customer insights can be efficiently realised at multiple points in the life cycle.

Direct dialogue with customers, increased insights about customers, ability to offer promotions at any time, all of these open up a radically different set of opportunities when it comes to the provision of insurance by the manufacturers.

Advancements in technology have become the principal force driving the transformation of distribution models for automobile manufacturers. Insurtech solutions  can play a critical role in helping manufacturers adapt to these changes. By offering customized insurance products and services, seamless integration, advanced analytics, and advanced claims management, insurtech can help manufacturers provide a seamless and personalized ownership experience that meets the evolving needs of customers.

Wrisk provides a robust platform stack and currently serves established premium brands in the automotive market. Wrisk platform offers cutting-edge features that are specifically developed to assist automobile manufacturers in swiftly adapting to the rapidly evolving distribution models without requiring frequent platform changes or compromising the branded experience.

The Wrisk platform empowers automobile manufacturers to create future-focused, data-driven, and seamlessly integrated insurance protection experiences that delight customers. By combining exceptional customer experience, advanced technology, insurance expertise, and a unique distribution strategy, we provide a significant advantage for automotive brands.

Furthermore, our deep integrations into an automobile manufacturers digital ecosystem enable access to novel data sources, which in turn unlock competitive underwriting advantages and facilitate frictionless question set enrichment. These integrations allow products to be seamlessly embedded at the point of sale, native apps, and other digital touchpoints, resulting in a significant conversion uplift and stronger customer relationships.

Our solutions can be scaled and deployed globally across multiple markets, offering a worldwide technology layer for the insurer partners to plug in their products and pricing. This enables them to innovate with new ideas and gain access to a wealth of data insights.

Thanks to its legacy-free technology architecture, the Wrisk platform can adapt to various assets and product lines. Whether it's a car, a bike or a van, the platform can be tailored to meet the specific needs of each product or asset type.

Some of the key features that we offer are:

Best-in-class customer experience tailored to your brand

  • Insurance in minutes
  • Easy self-service changes
  • Embedded within partner experience at key moments of truth
  • Digital notification of loss at the point of claim
  • Fully white-labeled to your brand across every channel

Best-in-class data insights to enable competitive advantage

  • Digital marketing optimisation
  • Easy integration with partner data (API Layer)
  • Machine learning to inform fraud detection, cross-sell, conversion 
  • Full Stack Analytics Suite including connected car data
  • Tight integration with automobile manufacturers systems

A digital-first, forward-looking & legacy free platform

  • Full-stack greenfield platform. Deep technology. No legacy.
  • Low-code. No-code. Platform/product configuration
  • Low-cost-to-serve as all processes index towards automation 
  • Fully digital Policy Administration and flexible payment flows
  • Able to cater to altogether new classes of insurance products
  • Able to support both dealership and agency models
  • I18n - Can be configured for different geographies/languages
  • Global Scaling - A partnership approach to governance with local teams in each territory.

The Wrisk platform allows automobile manufacturers to effortlessly incorporate fully branded and tailored insurance products and services, advanced analytics, and claims management into their current platform. This integration ensures a seamless and personalised ownership experience for their customers irrespective of the distribution model. The Wrisk platform provides a strong foundation for automobile manufacturers to continuously innovate and experiment with new models, enabling them to stay ahead of the curve and meet the evolving needs of their global customers.

If you wish to equip your organisation to adapt to these evolving trends and stay ahead of the curve, please reach out to us for a demo at sales@wrisk.co.