Home / Daily / IAG buys into car subscription service
16 July 2019
IAG has acquired a majority stake in car subscription and trading platform Carbar after participating with other investors in a $16.8 million capital raising.
The insurer says the investment will help it better understand emerging trends and play a key role in its future approach. IAG insures more than 3.2 million passenger vehicles in Australia and is one of the largest motor vehicle insurers in Asia-Pacific.
“The focus of our investment and the partnership moving forward will look at emerging mobility trends and providing new sources of value to our customers,” IAG EGM Innovation James Orchard told insuranceNEWS.com.au.
Carbar says using its service is similar to subscribing to Netflix. The payment arrangements cover insurance, registration, roadside assistance and maintenance and unlike leasing there is no lock-in contract.
The service, which started in Melbourne in 2016, has tapped into greater demand for alternative forms of vehicle ownership and usage arrangements, reflected also in the rise of car-sharing schemes. Carbar entered Sydney last month and plans to expand to new regions next year.
Motor insurance is provided through IAG’s CGU business.
Carbar CEO and co-founder Desmond Hang says IAG’s support will be instrumental in growing and developing the business and the investment is a good fit for both parties.
“We believe that there is a change in mobility and traditional vehicle ownership, and being one of the biggest insurers within Australia, IAG wants to be at the cutting edge of the mobility sector and how best to create insurance products around it,” he told insuranceNEWS.com.au
Carbar subscribers can elect to pay an initial upfront $1000 for a reduced weekly rate, or pay the regular weekly rates on the website. The company also provides a platform for buying and selling cars.
The latest capital raising follows an injection of $5.8 million by unnamed investors last year.