Japan is in the Innovators Drivers Seat with One-Day Car Insurance Managed By Smartphones - Telcoverager
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Japan is in the Innovators Drivers Seat with One-Day Car Insurance Managed By Smartphones

Japan is in the Innovators Drivers Seat with One-Day Car Insurance Managed By Smartphones

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Japanese telco operator NTT Docomo has joined forces with Japanese insurer Tokio Marine in a union of industry giants to offer several on-demand insurance offers via mobile phones. Apart from short term travel insurance (a new area of interest we covered in a previous article), this partnership allows NTT Docomo to also drive growth in other insurance markets; ‘intelligent’ medical insurance, one-time insurance for sport or leisure activities and ‘Choi-nori’ insurance – a.k.a one-day car insurance. All via mobile!


Short-term car insurance is in hot demand in Japan. Many youngsters in the country do not own vehicles and so simply rent or borrow a car when needed – a trend becoming increasingly common in other parts of the world. Reasons for this vary, but have a lot to do with ever-increasing road traffic caused by population growth, and, interestingly enough; generational priorities. Whilst Japanese baby boomers (and arguably, the global generation as a whole) saw the car as an aspirational symbol during the era of economic growth, millennials see the car as merely a tool to get around. This waning need for the car as a status symbol has had an enormous impact in the Japanese market, ultimately leading to a crash in vehicle sales and in its place an explosion of car-sharing and rental enterprises. Naturally, that has driven innovations in vehicle insurance offers.


Nowadays, young people everywhere are more likely to use car-sharing or car-rental services than buy their own cars.


Driving Innovation With Smartphones

One such innovation is the introduction of a one-day car insurance policy buyable via any smartphone, as exemplified by Tokio Marine’s joint offer with NTT Docomo. Clearly, these players are on the pulse of their customers changing lifestyles, and understood that a fusion would pave a profitable road to success. They weren’t wrong… their cumulative total of contracts sealed since 2012 hit 6.5 million as of the end of January 2018.


The simple mobile registration process has definitely contributed to this triumph, it being accessible to the huge smartphone oriented population. The ‘one-day-auto’ insurance offer can be scanned via QR code, which leads to a quick registration of personal and license details, coverage within one week of registration and the premium simply added to the monthly phone bill. This ease and speed of setup and payment has undoubtedly helped close millions of deals – a valuable lesson to other insurance and telco professionals exploring similar strategies.


Short-term car insurance that can be set up with your smartphone over a coffee are a big hit with younger generations


On-Demand Insurance has Far Reaching Benefits

The one-day-auto policy is also being marketed by many external agencies with their own invested interests. Unexpectedly, perhaps, car dealers actually benefit rather than suffer from offering these short term insurance deals from Tokio Marine and NTT Docomo’s partnership. Why? Because a percentage of one-day-auto users will still be interested in purchasing a vehicle later on in life, and so gathering that lead data in advance can be very valuable to the car salesman. One-day-auto users can also be converted onto annual plans, another reason why agencies ultimately profit from selling these short term solutions.


This example is a great demonstration how telcos can successfully drive growth with adjacent insurance offers by targeting a specific segment and providing them with an innovative, mobile-enabled insurance offer which was previously not available to those customers. Telcos need to start looking for these adjacent growth opportunities in the insurance market to preserve their revenue and profit growth.


If you’re a telco professional and are interested in the alternative revenue streams insurance provides, get in touch with the industry experts i-surance here.

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