In 2017, State Farm launched, with little fanfare, HiRoad, a startup that took a different approach to auto insurance. The usage-based insurance platform -- fully built around the smartphone app experience of latter-day programs, rather than the older tactic of using an OBD-2 device -- came after a couple of years of researching the right path for disruption in the insurance industry.
“[State Farm] formed a small team that traveled around the country, conducting really extensive research and trying to co-create with our target audience a new type of insurance,” says Steve Harris, VP of HiRoad. “And what we learned was that customers really wanted an insurance product that rewards them.”
The customer base Harris’s team was looking to reach were what he calls “mindful mobilites,” younger customers who are comfortable using apps to interact with all companies.
HiRoad worked with some vendors -- who Harris declined to name -- and did some internal development as well to put together the experience that rewards “mindful” choices behind the wheel with discounts. Rhode Island was chosen as the launch site due to its high concentration of these younger drivers, especially around the colleges and universities in the state.
After several years of success growing the customer base in Rhode Island, HiRoad now is selling policies in Arizona. Harris says that the upheaval caused by the COVID-19 pandemic is uniquely adaptable for HiRoad, because of its ability to move with agility through market forces.
“Things are a lot harder to predict now than they were a few years ago, and having something that's dynamic and agile and can respond to the events around us, we see as a real competitive advantage,” he says. “When we started [using] the term ‘mindful,’ people would kind of, you know, make fun of us.
“But now people's mental health is a very central thought,” he concludes. “The context has changed around us. It sets a perfect stage for insurers, like HiRoad, to take on that market and create a really positive result for everybody.”
