Table of Contents
Executive Summary
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- Market overview
- Top takeaways
- Insurers have created a discount-hungry consumer and must deal with the ramifications
- Why wait? Switching can happen at any time
- Property and casualty insurance doesn’t exist in a vacuum
- What it means/what’s next
The Market – What You Need to Know
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- Net premiums written tops $600 billion for P&C insurance industry
- State Farm owns nearly 10% of all P&C insurance policies
- Homeowners insurance has increased by nearly 50% in a decade, while renters remains flat
- Overwhelming majority of consumers own a car
Market Size
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- Net premiums written tops $600 billion for P&C insurance industry
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- Figure 1: P&C insurance industry income analysis, in current dollars, 2014-2018
- State Farm owns nearly 10% of all P&C insurance policies
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- Figure 2: Top 10 writers of property and casualty insurance, by direct premiums written, 2018
- Drivers spend over $900 per year to insure their vehicle
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- Figure 3: Average auto insurance expenditures, in current dollars, 2006-16
- Homeowners insurance has increased by nearly 50% in a decade, while renters remains flat
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- Figure 4: Average premiums for homeowners and renters insurance, in current dollars, 2007-17
Market Factors
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- Overwhelming majority of consumers own a car
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- Figure 5: Vehicle ownership, November 2019
- Homeownership rate hovers around 65%
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- Figure 6: Homeownership rate for the US, percent, annual, 2010-2019
- Over 60% of renters have moved in the past year
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- Figure 7: Housing situation, January 2020
- Figure 8: Housing situation – net, January 2020
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- Figure 9: American Family Insurance digital ad, September 2019
P&C Insurance and Tech
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- Insurers are partnering with tech companies, and consumers are starting to pay attention
- Interest in Smart Homes tech
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- Figure 10: Smart devices owned or considered, March 2019
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- Figure 11: Travelers smart home insurance mailer, March 2019
- Consumers want their homes to be secure and comfortable
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- Figure 12: Interest in smart home technology, March 2019
- Voice Assistants could get louder for P&C insurers
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- Figure 13: Smart speaker ownership, September 2019
- Consumers are theoretically excited to start using a voice assistant
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- Figure 14: Attitudes toward digital voice assistants, September 2019
- Consumer Attitudes Toward Technology are generally positive
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- Figure 15: Attitudes toward technology, August 2019
Key Players – What You Need to Know
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- New insurtech: Openly
- Climate change will continue to affect P&C claims
- D2C comes to the insurance market
What’s Working
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- Home telematics company partnering with multiple insurers to gather data
- GEICO could become largest auto insurer by 2022
- New insurtech: Openly launches in two states
What’s Struggling
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- Climate change will continue to affect P&C claims
- CA steps up to combat discrimination in auto insurance
What to Watch
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- D2C comes to the insurance market
- SoFi Protect
- Acorns Protect
- Land Rover Owners Insurance and Tesla Insurance
- Parametric insurance covers events likely to take place
- Event-specific insurance caters to to-be-weds
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- Figure 16: Travelers wedding insurance tweet, September 2019
The Consumer – What You Need to Know
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- Most US consumers have at least one policy; auto insurance most “popular”
- Most consumers prefer to keep policies with one insurer
- Price, customer experience still most important
- Half of consumers would recommend their P&C insurer
Insurance Ownership
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- Most US consumers have at least one policy; auto insurance most “popular”
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- Figure 17: Current property and casualty insurance ownership, January 2020
- Fewer than half of renters own a renters insurance policy
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- Figure 18: Current property and casualty insurance ownership, by homeownership status, January 2020
Bundling
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- Most consumers prefer to keep policies with one insurer
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- Figure 19: Bundling behaviors, January 2020
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- Figure 20: Liberty Mutual bundling email, December 2019
- Figure 21: AAA “Save in three ways” direct mailer, November 2019
- Gen Z consumers are the most willing to diversify their providers
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- Figure 22: Bundling behaviors, by generation, January 2020
- Renters are nearly evenly split on the possibility of bundling
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- Figure 23: Bundling practices, by P&C policy type, January 2020
Switching Behaviors
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- Auto
- Nearly a quarter of consumers have switched their auto policy in the last year
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- Figure 24: Likelihood to switch auto policies, January 2020
- Younger consumers are the least loyal to their auto insurer
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- Figure 25: Likelihood to switch auto policies, by age, January 2020
- Home
- Switching is slightly less common among property owners
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- Figure 26: Likelihood to switch home or condo policies, January 2020
- 18-34s still chasing the more advantageous price point
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- Figure 27: Likelihood to switch home or condo policies, January 2020
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- Figure 28: Nationwide direct mail piece, November 2019
- Renters
- Nearly 40% of renters are switching their policies bi-annually
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- Figure 29: Likelihood to switch renters policies, January 2020
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- Figure 30: USAA digital ad, 2019
Attitudes towards Switching Insurers
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- Price, customer experience still most important
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- Figure 31: Leading causes of P&C insurance switching, January 2020
- Mobile, online capabilities not considered “switchable” offenses
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- Figure 32: Motivation to switch due to mobile/online capabilities, by gender and age, January 2020
Usage of P&C Insurance Capabilities
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- Mobile
- Nearly 40% have downloaded their P&C insurer’s app, but age affects downloads
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- Figure 33: Usage of mobile capabilities through P&C provider, January 2020
- Younger consumers are interested in downloading their insurer’s app, but need to be shown why they should
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- Figure 34: Downloads of P&C insurer’s mobile app, by age, January 2020
- Figure 35: Use of mobile capabilities, by age, January 2020
- Purchasing behaviors
- Low interest in nontraditional providers and processes
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- Figure 36: Interest in using nontraditional companies or payment methods, January 2020
- Smart homes and telematics
- Insurers should invest in future use
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- Figure 37: Interest in telematics or smart home technology, January 2020
Choosing a P&C Insurer
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- Outside of price, customer service remains most important
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- Figure 38: Top factors when choosing a P&C insurer, by age and gender, January 2020
- Digitization is not a differentiator
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- Figure 39: Digital factors of P&C insurer selection, by generation, January 2020
Attitudes toward Property and Casualty Insurance
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- Half of consumers would recommend their P&C insurer
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- Figure 40: Willingness to recommend auto or homeowners/renters insurer, January 2020
- Consumers are willing to share their information for a discount
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- Figure 41: Attitudes towards data sharing and paying more for a policy, January 2020
Appendix – Data Sources and Abbreviations
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- Data sources
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
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