The subscription model has quickly grown to replace the desire for consumers to purchase much of their content.
The model that has proven hugely successful with music via Spotify and films with Netflix seems to be seeing if it can survive other sectors - including car ownership.
For a flat rate, car makers like Volvo, Ford and Porsche are all making car 'ownership' a more simplified experience. Rather than incurring fees for repairs and insurance, this all-inclusive model is becoming attractive to consumers who value convenience over price.
For auto insurers this provides yet another threat to a business that seems to be getting attacked from all directions (comparison sites, on-demand, autonomous). However, this subscription model does provide an opportunity - but only for a select few insurers willing to move fast enough.
As these automakers look to build out these initiatives they will likely select a single insurer to provide their coverage.
If the auto subscription model proves successful it may very well result in a huge portion of cars on the road being insured by only a few carriers.
If 50% of Fords on the road all come with the same insurance how does that impact the remaining market for other auto carriers?
It won't be a winner-takes-all market but this trend could usher in a world where only a few carriers could command a disproportionate amount of premium.
The emergence of new car subscriptions could also have a significant impact on the P&C insurance industry depending on the longer-term adoption and scale of such programs. Because most car subscription programs come with insurance coverage included, consumers that sign up do not need to go out and obtain car insurance on their own.
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