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Innovative Business Models in Automotive Finance and Insurance, Forecast to 2025

  • Report

  • 64 Pages
  • December 2018
  • Region: Global
  • Frost & Sullivan
  • ID: 4721860

Fintech Growth in Finance and Insurance Expected to Boost New Car Loan and UBI Policy Volumes by 2025

The 24/7 connectivity and instant gratification are transforming the way we operate and automotive F&I is no exception to that. Automotive manufacturers, financial institutions, and technology companies are realizing the numerous advantages of integrating millennial-centric solutions and payment options for insurance and finance; fundamentally changing their business models to match the demand of millennial. The auto F&I industry is optimizing its processes, reducing operational costs, making processes faster and secure, and improving the customer experience by going digital.

Various mobile applications and Websites for vehicle finance are providing personalized consulting services, resulting in customers taking informed decisions related to the total loan amount and EMI. Banks have understood the importance of the auto finance business in their balance sheets and are developing automated lending solutions either by themselves or through collaborations with fintech startups. JP Morgan Chase, Ally Financial Inc., and PNC bank are among the proactive banks to partner with fintech firms for improved digital customer offerings in auto finance.

The auto insurance industry is also following the digitization wave with telematics powered UBI models. Start-ups with their digital solutions are disrupting the traditional business models with On-demand insurance. UBI has become a mainstream model for insurers and the F&I divisions of OEMs, as over 250 telematics programs are launched globally. On-demand economy including car-sharing, ride-sharing, and integrated mobility requires new kinds of insurance and dynamic business models. With telematics companies foraying in, the UBI carriers are ready for UBI 2.0 revolution. Fintech such as Cuvva, By miles, Snapsheet are revolutionizing the auto insurance with the online application, processing, and claim settlement solutions.

In an effort to stay ahead of the disruption curve, it is imperative for participants to adapt to the technology-driven processes and focus on customer experience throughout. Innovations around the business model by creating customer touch points are vital to sustaining in the age of digitization.

Research Scope
The study covers major changes in traditional business models that have been observed since 2015, the effect of CASE technologies in auto finance and insurance and future business models that are to be implemented for growth. The study discusses the factors/trends affecting consumer expectations such as digitization and vehicle ownership trend.

Table of Contents

1. Executive Summary
  • Key Takeaways
  • Digital Financing Optimizing Lending Experience
  • Digital Operations: Opportunity Analysis
  • Future of Traditional Insurance: UBI Models
  • Data Analytics for UBI Insurance Models
  • Current Status and Outlook

2. Research Scope, Objectives, Methodology, and Assumptions
  • Research Scope
  • Finance and Insurance Scope
  • Research Aims and Objectives
  • Key Questions This Study Will Answer
  • Research Methodology
  • Research Background
  • Definitions

3. Innovation in Finance Business Models
  • Key Takeaways
  • Auto Finance Market Size and Forecast
  • New Vehicle Loan Penetration Forecast
  • Automotive Finance Market-Moving Toward Digitization
  • Disruption in Auto Finance-Digital Financing Optimizing Lending Experience
  • Innovative Finance Models-Chase/Ally/PNC: Banks in Digital Financing
  • Innovative Finance Models-Autogravity: Online Loan Processing
  • Innovative Finance Models-AutoFi: Digital Sales Channel for Auto Dealers
  • Innovative Finance Models-Apple Pay: Mobile Payment Options for EMI
  • Innovative Finance Models-Toyota/Hyundai/Renault: Dealer Financing
  • Innovative Finance Models-CPO Programs
  • Innovative Finance Models-Captive Financing for CPO Cars

4. Innovation in Insurance Business Models
  • Key Takeaways
  • Future of Traditional Insurance-Usage Based (UBI) Models
  • UBI Market Size and Forecast
  • Percent Forecast of UBI Policies by Device Type
  • Innovative UBI Business Model-On-Demand and Pay-per-mile Insurance
  • Benchmarked Insurance Companies in UBI
  • Benchmarked Insurance Companies in UBI (continued)
  • Innovative UBI Strategies-Cuvva: Digital Pay-As-You-Go Insurance
  • Innovative UBI Strategies-ClaimDi: Digital Insurance Processing
  • Innovative UBI Strategies-Snapsheet: Digitizing Claim Settlement
  • Innovative UBI Srategies-Engie App & Warranty Direct
  • Innovative UBI Strategies-The Floow: Data Analytics for Insurance
  • EV Technology-Opportunity Analysis for Insurance Companies
  • Autonomous Technology-Opportunity Analysis for Insurance

5. Growth Opportunities
  • Growth Opportunity
  • Strategic Imperatives for Success and Growth-Finance
  • Strategic Imperatives for Success and Growth-Insurance

6. Conclusion and Future Outlook
  • Key Conclusions
  • Future Outlook
  • The Last Word-3 Big Predictions
  • Legal Disclaimer

7. Appendix
  • List of Acronyms
  • Market Engineering Methodology
  • List of Exhibits

Companies Mentioned (Partial List)

A selection of companies mentioned in this report includes, but is not limited to:

  • Ally Financial Inc.
  • Apple Pay
  • AutoFi
  • Autogravity
  • Chase/Ally/PNC
  • ClaimDi
  • Cuvva
  • Engie App & Warranty Direct
  • JP Morgan Chase
  • PNC bank
  • Snapsheet
  • The Floow
  • Toyota/Hyundai/Renault