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Road Assistance in the USA

  • November 2014
  • -
  • Finaccord
  • -
  • 27 pages

Road Assistance in the USA is a report about the market for this type of assistance – sometimes referred to as breakdown recovery insurance – acquired by individual consumers in the US. The research is based on a primary survey of almost 190 actual and potential distributors of road assistance in the US including automotive clubs, motor (auto) insurance brands, car manufacturer brands and independent warranty providers. For each of these organisations, it establishes whether they offer road assistance in any format or not and, if they do, the partner assistance firms with which they work if they do not report managing the service themselves on an internal basis.

Having presented the provision rates for road assistance across these main categories of distributor, the study then compares the operating models that they use, shows which providers of road assistance hold the most partnerships in each category and comments upon the importance of other distribution options including online aggregators and packaging with banking products. Moreover, it quantifies the value of the market for road assistance acquired by individual consumers in the US in 2014, segmented by distribution channel, presents the likely market share by revenues of the leading competitors, and provides forecasts for the value of the market up to 2018.

Table Of Contents

Road Assistance in the USA
0.0 EXECUTIVE SUMMARY 1
1.0 INTRODUCTION 3
What is this report about? 3
Rationale 3
This is the first ever published study about the market for road assistance in the US. 3
.in part because the distribution of it involves several very different channels 3
Methodology 3
Primary research 3
Research for this report includes close to 190 actual and potential distributors of road assistance. 3
Market data 4
Competitor data 4
External sources 5
Definitions 5
Terms and abbreviations 5
Operating models 5
Currencies, exchange rates and inflation 6
PartnerBASE 6
Finaccord 6
2.0 MARKET ANALYSIS 8
Introduction 8
Distribution through key partner organisations 8
Summary of organisations researched 8
Most AAA motor clubs operate full-service insurance agencies 9
Provision rates 10
Road assistance is available from most car manufacturer and motor insurance brands 10
Operating models 11
Use of a single external road assistance provider constitutes the most regular operating model 11
Several large insurance groups have established captive assistance firms in this area 11
Partnerships with car manufacturer brands 13
Comparatively few providers hold mandates in this quite concentrated market… 13
… with Cross Country Motor Club (Agero) the leader in terms of number of partnerships… 13
… followed by three assistance brands backed by Allstate Roadside Services 14
Partnerships with motor insurance brands 14
Most motor insurance brands provide road assistance arranged with an external partner… 14
… with a supply structure that fragments rapidly in the wake of category leader Cross Country Motor Club 15
Some motor insurance brands organise towing and labour cover themselves on an internal basis 15
Partnerships with independent warranty providers 16
Road America and Nation Safe Drivers claim the most partnerships with independent warranty providers… 16
… in a field populated by nine assistance firms that hold mandates with such providers 16
Partnerships with automotive clubs 17
Driven Solutions distributes road assistance cover through several captive automotive clubs… 17
… as does Fortegra (which has been acquired by Tiptree Financial) 17
Most automotive clubs organise and administer their assistance services on an internal basis 18
Other distribution channels 19
Direct distribution and other online brands 19
Only one assistance provider has developed a purely direct-to-consumer proposition… 19
… although Auto Advantage has set up AutoRoadService.com as an online brand 19
Payment cards and bank accounts 19
Three providers have secured particularly significant partnerships with major payment card issuers… 19
… and Fortegra's Auto Knight Motor Club is used by an organisation serving credit union members 20
Online aggregators and brokers 20
Other types of distributor 20
Road assistance is also available in the US from mobile network operators. 20
.and through various GPS systems such as OnStar FMV 20
A number of substantial trade unions market road assistance services to their members. 20
.as do various membership clubs serving senior citizens 21
A number of car servicing companies foster customer loyalty through road assistance schemes 21
Market size and forecast 21
In spite of its maturity, Finaccord expects that the market value will grow in real terms 21
A burgeoning connected car market has the potential to disrupt traditional distribution models. 22
…although direct sales will continue to account for the majority of this market 22
Leading competitors 24
Agero and Allstate Roadside Services command the largest share of revenues. 24
Motor Club of America, the largest motor club by number of members, makes its way into the top ten 25
Together, AAA-affiliated automotive clubs account for a sizable share of the total market 25
Driven Solutions was acquired by Innovation Group in September 2014 26
MAPFRE's Road America serves around 22 million customers in the US through various partnerships 27

LIST OF GRAPHICS / TABLES

0.0 EXECUTIVE SUMMARY 1
Key market data for road assistance in the US 2
1.0 INTRODUCTION 3
2.0 MARKET ANALYSIS 8
Summary of potential distributor organisations researched in the US, segmented by type, 2014 10
Provision rates for road assistance in the US, segmented by type of organisation, 2014 11
Operating models used for road assistance in the US, segmented by type of organisation, 2014 12
Operating models used for road assistance in the US, segmented by type of organisation, 2014 (table) 13
Competitor share of partnerships for road assistance in the US, 2014: car manufacturer brands 14
Competitor share of partnerships for road assistance in the US, 2014: motor insurance brands 16
Competitor share of partnerships for road assistance in the US, 2014: independent warranty providers 17
Competitor share of partnerships for road assistance in the US, 2014: automotive clubs 18
Estimated gross written premiums and other revenues from road assistance in the US, 2014, plus
forecast for 2018 22
Estimated gross written premiums and other revenues from road assistance in the US, segmented by
distribution channel, 2014 23
Estimated number of policies and gross written premiums and other revenues from road assistance in the
US, segmented by distribution channel, 2014, plus forecast for 2018 (table) 24
Individual competitors' estimated market shares of gross written premiums and other revenues for road
assistance in the US, 2014 26

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Roadside Assistance

ref:plp2014

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