CREW_Launching rental car insurance for Europe at Expedia.

Starting point

Idea

Issues faced by users.

Some user Quotes
— “Its missing basic features like damage excess reduction”
— “I cant see how to reduce excess on this car. I am booking elsewhere.”
— “This site completely ignores car insurance, ie. how to redue [reduce] £1500. Everybody knows that insurance can double the price at the counter. Without this information I will not be booking with Expedia”

We found other issues also which we passed on to the Car’s team (attached in Appendix 1 below)

Investigation and observations

A major gap in offering — Expedia was the only significant online travel platform operating in Europe that didn’t offer an insurance upgrade option to its user

‘Basic’ is not enough — As per regulations in the EU, suppliers must include basic insurance with every rental car. Renting a vehicle works differently in the USA, where such a rule does not exist. But, basic insurance comes with serious limitations. Some of them are as follows:

  • Limited coverage — Basic insurance plans don’t cover glassworks, tyres and other body parts. Also, users are not aware of these limitations.
  • Excess — This is the primary pain point for our users. Paying excess is financially draining, making basic insurance not so helpful. Understanding excess is essential here. Let us assume collision damages a car leading to a repair cost of £3000. Here, the user has to cover the first £1000 from her pocket, whereas the basic insurance covers the rest of £2000. In this example, £1000 is an ‘excess’. Generally, the excess ranges from £1000-£2500.

Users want to upgrade default basic insurance— The question was, do users upgrade insurance from an online travel agent (OTA)? Yes, between 40 to 80% of users (40% in France and 80% in Germany) upgrade basic insurance. A user quote also supported the idea.

Value for money to buy from OTAs — Upgrading insurance costs £6 -8 per day. Similar product at the counter offered by suppliers is £28 -36 per day, making it 3 to 4 times more expensive.

Expedia is losing significant business — Insurance makes approx. 15% of the total booking amount with a margin above 80%. This potential was entirely untapped.

Less friction on UK POS than US POS due to car inventory type— In the USA, 95% of the inventory is ‘pay later’, meaning users can book a car and pay the entire amount at the time of pickup. User can checkout on Expedia.com without providing card details unless they add insurance. If insurance is added, users have to provide card details and pay for insurance at checkout. Therefore including insurance adds friction to the overall purchase experience.

Whereas, in Europe, more than 90% of car inventory is pay at the time of checkout. It becomes more convenient for the users to upgrade insurance at the time of checkout. Unlike the USA point of sale, users have to add card details in all the scenarios.

6% more users add insurance when they pay for the car at the time of checkout than users paying for the car at the time of pickup. This fact highlights the friction in the purchase experience for ‘pay later’ customers.

Customer problem statement

Business opportunity

Design strategy and process

  • MVP — What it would be like
  • Product backlog to be followed by MVP
  • Northstar vision

Narrowing down on a concept

Concept 2: Insurance is upgraded on checkout — This is how users add insurance on US POS.

It was not possible to run an AB test on both concepts. It was not a judicial use of tech bandwidth. We conducted a user study to narrow down a concept. There were two factors in decision making:-

  1. User preference — weightage 70%
  2. Complexity at engineering level / Time to market— weightage 30%

Objective

Screening criterion

  • A resident of the UK and fluent in English.
  • Must have booked a car from any OTA or supplier in the past 2 years for a trip in Europe.

Test setup

The first part

Questionnaire

  1. What do you understand by premier protection plan?
  2. What do you think about adding insurance on this path?
  3. *Can you please recall what you saw on the previous screen (infosite) (applicable only for first design)

The second part

Questionnaire

  1. Out of two options which one will you prefer and why
  2. Where do you think it is was more manageable for you to understand the premier protection plan.

Key findings

  1. 3/8 users preferred concept 1. 1 participant was not sure and didn’t pick any option. There was no strong preference or reasoning for the choice. In conclusion, there was no clear preference for any of the concepts.
  2. Participants were able to complete the task of car booking without any confusion and hand-holding. Users were able to upgrade insurance or considered upgrading insurance in both concepts.
  3. In concept 1, participants were unsure about what will happen if they add insurance to one car and go back to the search result page and select another car.
  4. In concept 1, All 4 participants noticed insurance on the infosite, whereas 1 out of 4 participants missed the priming message in concept 2 completely. Seeing insurance offering didn’t translate to reading details or making a decision(elaborated in next point).
  5. On infosite, participants spent less time irrespective of the design they were looking at. Participants wanted to know more about car details. Insurance was not the priority. Therefore in future, there is a possibility of users not discovering insurance offering in concept 1.
  6. One participant pointed out that he expected to see the insurance offering again on the checkout page after he has decided on the car.

Tech team outlook

Outcome

Success metrics

  1. Overall GP (Primary)
  2. More people should be renting a car on Expedia — Conversion rate.
  3. Attach rate of insurance should be more than 40%.
  4. More users should reach checkout page — Funnel progression from Search result page to

Prototype MVP

Design and improvement

Peer review — helped in making offering more neutral and less enforcing, also helping rectify usability issues related to the content or design layout.

legal review — We knew that insurance is a highly regulated business in the USA, and we have to be careful around what we present to the users. We found the EU is more regulated. So unlike other projects, we tried to keep legal teams in the loop for regular feedback helping us to factor in legal limitations early in the process. We weren’t fully successful in achieving this but we learnt from the process.

User feedback — we conducted multiple informal, remote and short usability testing to get the feedback on content and identify gaps in understanding the product offering.

Impact

Overall incremental GP: $194,113 ± $65,855

LOB incremental CVR: 1.96% ± 1.43%
Insurance incremental GP: $180,663 ± $29,981
Insurance attach rate in UK: 39%

NPS: Not reliable as a lot of negative sentiment due to covid related cancellations and refund

Data reported on 9th Nov 2020 for UK Pos.

Phase 2: Northstar

Supplier not honoring insurance
In the USA, this is one of the primary issues users face at the counter when Expedia’s insurance is not honored due to multiple reasons. We expect a similar trend in Europe.

Advantages of supplier insurance
Supplier insurance offers some exclusive benefits which Expedia or any other OTA can’t provide. Some users would like to drive a rental car with these benefits provided by the supplier: -

  1. Reduced or no deposit — The deposit could be as high as $2000, which could be reduced to $0 if the user purchases supplier insurance.
  2. Claim free process — Users are not required to file a claim for reimbursement if something unexpected happens.
  3. Roadside assistance — As per research, roadside assistance is the second most desired benefit after zero excess. Currently, AIG can’t offer this.

Appendix 1
Issues reported by users through opinion lab

  1. listings far away from the desired location were shown to the users. This distance was sometimes more than 50km.
  2. Additional driver information was not clear
  3. Payment failure and other issues on checkout.
  4. Information related to the deposit amount wasn’t clear
  5. Users faced issues related to credit card not getting accepted at the time of pickup. We found some reasons for this issue, for example:- Amex was not accepted by some suppliers, Debit card was not accepted, credit limit was not enough.
  6. Language mismatch between policy document and point of sale language

The team behind the project

Design SWARM participants: Ashwyn Singhal, Jyotika Bindra, Ritika Suri Mendiratta, Navya Anand, Vikas Goel, Mohit Verma,

Thanks for reading. Please reach out at vikasgoel91@gmail.com. to share feedback or know more about the project.

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