Top Insurance Trends of 2024

Ride-sharing and delivery services work because they take advantage of the high ownership yet low utilization of vehicles. But they're not a perfect fit for how vehicles are generally used—or how they're generally insured. Zego is a specialty insurer targeting delivery workers. It offers car insurance for increments as short as an hour, and covers the commercial uses that aren't covered by standard car insurance policies.

For a typical car owner, getting commercial insurance can cost hundreds of dollars extra each year. This places a high upfront cost on starting to deliver, putting it out of reach for people who are doing delivery as a side gig, or who live paycheck-to-paycheck and need a delivery job to cover the bills. By tying cost to usage, Zego converts insurance from a fixed cost to a marginal cost, lowering workers' barriers to entry. In one sense, Zego is the insurance industry's answer to the on-demand economy: just as Airbnb is more affordable than owning a vacation home year-round, and Rent the Runway is more affordable than buying a steady stream of high-end dresses. Zego is a way to rent insurance, rather than buy it.

Zego works with food delivery companies to promote its service. It's beneficial to both sides: delivery companies don't have to worry about missing out on uninsured workers, or losing workers who get in trouble for operating without insurance. Like HipCamp, Zego helps users get over the insurance-cost hump so they can start earning money. Deliveroo drivers say that Deliveroo actually prioritizes drivers who are insured through Zego when allocating deliveries. They don’t just assist in operations, but in driver acquisition: Zego runs ads targeting people who don’t do delivery because they don’t have insurance. Getting commercial insurance is a barrier to working in on-demand delivery, as more apps start to suggest it or require it, and Zego has built its business on knocking down that barrier.

When Domino’s added a pizza tracker to its ordering app, it saw a spike in orders (Google and Domino’s both went public in 2004, and Domino’s stock has actually outperformed Google’s over that time period). For many customers, seeing that their order is making progress is more important than exactly when it arrives.

E-Commerce is often framed as the Empire versus the Rebel Alliance; Amazon as a titanic company that does everything, competing with a vast ecosystem of smaller companies that each do one thing well. Route is a part of that alliance, and its core service is providing live package tracking and shipping insurance.

Route’s app is free for merchants, and their monetization strategy is unique: Merchants let Route offer their shipping insurance product during the checkout process which benefits both the customers and the merchant. The merchants get higher conversion rates from the package tracking offer and the insurance, and the customers get to see where their order is and make sure it arrives without issues.

This is a common fintech model: the trick is not necessarily creating a product customers want, but finding a cost-effective way to sell it to them. In Route’s case, the trick is to offer merchants and their customers something useful for free (package tracking), and then use that offer to sell some customers a related financial product (insurance).

Marketing insurance is a challenge, because you can’t show someone “having insurance” in a TV ad. One option is to market the product through a character—major insurance companies have spent billions of dollars creating positive associations with the Geico Gecko and the Aflac Duck.

Car insurance companies also advertise heavily on radio and podcasts, as more than half of radio listening is done in the car. In fact, insurance companies ran 272 billion ads in 2018. But The Zebra, an insurance aggregator, has a different strategy: they focus mostly on long-tail SEO. They target a large number of very narrow terms, like individual makes and models of vehicles, and narrow age slices like “cheap car insurance for 19-year-olds”. This strategy has paid off: the 2nd and 3rd most expensive domain name sales in history were CarInsurance.com ($50M) and insurance.com ($36M), but TheZebra.com, at 1.7M monthly visits, has nearly six times as much traffic as carinsurance.com.

Like travel, insurance is fragmented: since it’s legally required and regulated at the state level, there are essentially fifty different insurance markets so aggregators naturally do well in this space. But insurance has a key differentiator compared to travel: the ultimate product is entirely financial, which means that companies ultimately compete on cost. At the end of the day, nearly everything in consumer finance comes down to user acquisition cost.