Effective today, Puerto Rico consumers will have a new online option when it comes to buying car insurance. Velox24.com, a novel insurance agency founded by three young entrepreneurs and affiliated with underwriter QBE Optima Insurance Co., will begin offering online policy quotes and sales 24 hours a day.
During a meeting with members of the media, Velox24.com President Antonio Ortiz-Martí said the new service boils down to offering fast, simple and economical coverage.
Consumers will be able to enter their vehicle information and, in about five minutes, decide to buy their insurance policy, whenever and whereever they want, entirely via the Internet by answering simple questions, he said.
“Our goal is that consumers have a pleasant experience when visiting our website to buy auto insurance. Once they make the purchase, the consumer will receive their policy immediately via email. This direct access digital platform can represent more than 35 percent in savings to the insured customer,” he said.
He also noted that this service will be especially beneficial to new car buyers, who can opt to insure their new vehicles for cheaper.
“Thirty percent of the policies sold at the dealerships are annual full cover policies. Saavy consumers are moving away from signing up for multi-annual policies that are included in the sale price and interest charges to alternatives they can get for the protection they need during the time they need to have it,” he said.
Ortiz-Martí, along with partners Carlos Nieves and Marcos Alemán — all insurance professionals — dove into this venture based on the belief that Puerto Rican consumers are ready to buy their auto insurance policies online and benefit from discounts. The Velox24.com service works much like Geico and Progressive do in the U.S. mainland market.
“To offer the discounts, we had to work on developing a sophisticated model that considers factors and variables that are presently not used in local industry to determine the final premium to pay for car insurance,” said Nieves, vice president of finance. “In addition, we developed a highly efficient business model to transfer those savings to our customers when purchasing their policy.”
17 months in the making
The Velox24.com platform began to take shape in May 2010, when the trio began analyzing similar models already in use and succeeding around the globe, Ortiz-Martí said.
Specifically, the trio looked into the systems used by London companies Direct Line and Swiftcover.com, which they believed were pioneers and incorporated the quality and knowlege they needed. It took a $2 million investment and more than two years to set up the local operation.
However, Ortiz-Martí believes the time is right now to launch this type of service, given the growing maturity of the Puerto Rican Internet user.
“We believe the Puerto Rican consumer is ready for this type of service model because Internet usage has reached 1.6 million people on the island, of which 30 percent are engaging in online transactions,” he said. “This is not a passive Internet user anymore. Studies show that about 70 percent of online shoppers have asked for an online insurance quote, and 55 percent have gone on to buy the policy.”
During a quick tour of the website that goes live today, Ortiz-Martí explained the step-by-step process to buy a policy, which can be paid in installments and with a credit card or via direct debit to a bank account. The policy is underwritten by QBE Optima Insurance Co., which is also responsible for cutting claim checks.
Meanwhile, Alemán, vice president of business development, said the platform integrates the highest levels of online security and anti-fraud mechanisms to guard against online scams.
While the service will initially be accessible only via the website — formatted also for tablet computers — early next year, Velox24 will launch an app to allow users to access the service via smartphones.