April 04, 2014

Today’s financial services companies struggle with the challenge of attracting young and tech-savvy customers. It can be difficult to determine which strategy will appeal most to the incoming generation of consumers, and businesses must familiarize with their behavior in order to figure out which tactics are best.

UK-based auto insurer Ingenie chose to exclusively target consumers in the 17-to-25-year age range. The company leverages UBI technology to monitor their behavior, provide consistent feedback, and offer reduced premium rates based on the drivers’ road safety.

“Young drivers just have too many crashes,” said Ingenie CEO Richard King, who spoke about the company’s journey in his keynote at Celent’s Innovation and Insight Day held in New York City’s Sheraton Times Square on April 3. One in five experiences an accident within their first six months of driving, he noted.

[ More on telematics: Truck Insurer Embraces Driver Coaching. ]

Ingenie sought to address this problem with “black box” technology that is installed in customers’ vehicles and collects data on their driving behavior. The information gives an accurate picture of how the car is being used and provides drivers with feedback through a mobile app. Every three months, those who exhibit safe driving skills receive a discount on their insurance premium.

“We’ve really disrupted the insurance process in the UK,” King noted. “The average Ingenie customer could see their insurance premium go down by fifty percent in the first year.”

Accidents caused by young drivers relate more to attitude than inexperience, said King, and 95% of crashes are linked to driver behavior. Ingenie conducted extensive research to learn more about the mindset of its target audience and determine how it could appeal to young consumers then incentivize them to change their performance behind the wheel.

Ingenie’s customer base likes being reached through social media but would rather participate in a conversation than receive a sales pitch, King explained. The company’s Facebook page functions as a customer service portal through which policyholders can ask questions and request phone calls. Ingenie maintains an honesty by keeping unfriendly messages on its page and frequently taking conversations offline.

Social media also inspired the design of Ingenie’s mobile app. Drivers receive feedback every ten days in the form of Twitter-style notifications that are color-coded according to behavior. Green messages indicate they are performing well and will receive a discount while red ones denote poor driving habits. Black notifications, which are given for truly dangerous driving, are followed up with a phone call from an Ingenie representative.

Customers have been largely responsive to Ingenie’s mobile strategy. Over 90% of them regularly engage with the app, said King, and drivers are constantly tweeting and sharing screenshots that indicate safe behavior. “Better driving has suddenly become quite cool,” he noted. Parents are also relieved to know their children are adopting safe habits.

Ingenie currently insures four million drivers in the UK between the ages of 17 and 25. Ninety percent of them are under 21 years old. The company is currently planning to expand into Canada and will bring its business to the U.S. in early 2015.

Kelly is an associate editor for Insurance & Technology. Prior to joining InformationWeek Financial Services, she was a staff writer for InformationWeek and InformationWeek Education. Kelly has also written for trade ...