Table of Contents
Executive Summary
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- Top takeaways
- Ideal P&C insurers in the next normal will provide value through personalized offerings, digital solutions and exemplary customer service
- Providers should reward loyalty in a high-switching marketplace
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- Figure 1: Top causes of P&C insurance switching, January 2021
- Digital is a key differentiator when seeking the business of young consumers
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- Figure 2: Usage of mobile capabilities through P&C provider, by generation, January 2021
- Market overview
- Impact of COVID-19 on property and casualty insurance
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- Figure 3: Short-, medium- and long-term impact of COVID-19 on property and casualty insurance, April 2021
- Opportunities and challenges
- While low prices are king, a customer-centric approach should be critical
- Innovation is no longer an option, but a necessity for P&C insurers
- Continue leveraging smart partnerships that provide value for consumers
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- Figure 4: Hippo partners with Xfinity, June 2019
The Market – Key Takeaways
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- Net premiums written grew by 3.5%, totaling $634 billion for the P&C insurance industry
- State Farm remains the biggest P&C insurer, with a 9% market share
- Homeowners insurance premiums continued growing, as renters stagnated
- Consumers are continuing to drive more – Another good sign for auto insurers
Market Size
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- Net premiums written grew by 3.5%, totaling $634 billion for the P&C insurance industry
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- Figure 5: P&C insurance industry income analysis, in current dollars, 2015-19
- State Farm remains the biggest P&C insurer, with a 9% market share
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- Figure 6: Top 10 writers of property and casualty insurance, by direct premiums written, 2020
- Homeowners insurance premiums continued growing, as renters stagnated
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- Figure 7: Average premiums for homeowners and renters insurance, in current dollars, 2008-18
- Consumers pay over $1,000 a year for auto insurance
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- Figure 8: Average auto insurance expenditures, in current dollars, 2008-18
- Impact of COVID-19 on property and casualty insurance
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- Figure 9: Short-, medium- and long-term impact of COVID-19 on property and casualty insurance, April 2021
- Lockdown
- Reemergence
- Recovery
- COVID-19: US context
- Learnings from the last recession
Market Factors
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- Lower unemployment rates mean more confident consumers
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- Figure 10: Consumer confidence and unemployment, 2000-January 2021
- Consumers are continuing to drive more – Another good sign for auto insurers
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- Figure 11: Seasonally adjusted vehicle miles traveled by month, January 2015-January 2021
- Climate change remains a long-term threat to P&C insurers
Market Opportunities
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- Being open to more partnerships can further P&C brands’ digital footprint
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- Figure 12: Usage of mobile capabilities through P&C provider, by generation, January 2021
- Parametric policies could help mitigate climate risk
- P&C insurers should look to target the growing homesharing market
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- Figure 13: App usage and interest in past year, January 2021
Companies and Brands – Key Takeaways
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- USAA collaborates with State Farm to settle subrogation claims via blockchain
- Metromile continues to find its niche in the pay-per-mile space, but competition could spell trouble
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- Figure 14: Metromile direct mail, December 2019
- Liberty Mutual uses AI to prevent workplace injuries through its ErgoValuatorTM app
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- Figure 15: Liberty Mutual’s ErgoValuatorTM, November 2020
Competitive Strategies
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- Embracing innovative technologies will set apart P&C insurers in the future
- Metromile teams up with Ford for easier access to usage-based insurance
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- Figure 16: Ford partners with Metromile, September 2020
- Lemonade uses AI to power its focus on speed and simplicity
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- Figure 17: Lemonade, Get insurance in 90 seconds with Lemonade’s app, July 2018
- AmFam’s KnowYourDrive incentivizes safe driving with behavioral-based telematics
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- Figure 18: American Family Insurance, KnowYourDrive, March 2021
The Consumer – Key Takeaways
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- Majority of consumers own one P&C policy, with auto insurance the most popular one
- Over half still prefer to bundle their policies with one insurer
- Consumers still focus on price – Providers need to change the conversation to focus on value
- Customer service still matters
- A third of Millennials would pay more for a policy if the company had a great reputation
What the Future Holds for P&C Customers
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- Consumers will be looking for more flexible auto coverage
- Home insurers should check in with customers considering renovating their homes
- Renters could look to transition into homeownership to take advantage of the current low-rate environment
Insurance Ownership
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- Majority of consumers own one P&C policy, with auto insurance the most popular one
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- Figure 19: Current property and casualty insurance ownership, January 2021
- Gen Zers and Millennials are less likely to own auto and homeowners policies
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- Figure 20: Current property and casualty insurance ownership, by generation, January 2021
Bundling Habits
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- Over half still prefer to bundle their policies with one insurer
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- Figure 21: Bundling behaviors in the past two years, January 2020 and January 2021
- Gen Zers and Millennials are the least loyal to their providers
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- Figure 22: Bundling behaviors, by generation, January 2021
- Renters policyholders are more likely to be with different companies compared to auto and homeowner policyholders
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- Figure 23: Bundling practices, by P&C policy type, January 2021
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- Figure 24: Progressive renters insurance email, January 2021
Switching Behaviors
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- Auto
- Nearly a quarter of consumers have switched policies in the last two years
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- Figure 25: Likelihood to switch auto policies, January 2021
- Millennials are most frequent auto insurance switchers
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- Figure 26: Likelihood to switch auto policies, by generation, January 2021
- Home
- Switching a homeowners policy is the least common across P&C insurance
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- Figure 27: Likelihood to switch home or condo policies, January 2021
- Millennials are more willing to switch their homeowners policy if it means better value
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- Figure 28: Likelihood to switch home or condo policies, by generation, January 2021
- Renters
- A third of renters have switched in the past two years
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- Figure 29: Likelihood to switch renters policies, January 2021
Attitudes toward Switching Providers
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- Consumers still focus on price – Providers need to change the conversation to focus on value
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- Figure 30: Top causes of P&C insurance switching, January 2021
- COVID-19 changed driving habits – But not significantly
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- Figure 31: Top causes of P&C insurance switching, January 2021
- COVID-19 has made consumers embrace digital when it comes to their insurance
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- Figure 32: Usage of mobile capabilities through P&C provider in the past two years, January 2021
- Gen Zers and Millennials prefer a mobile app experience
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- Figure 33: Usage of mobile capabilities through P&C provider, by generation, January 2021
Purchasing Behaviors
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- Consumers still prefer traditional ways of buying P&C insurance
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- Figure 34: Interest in using nontraditional companies or payment methods, January 2021
- Younger consumers are more open to nontraditional providers
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- Figure 35: Interest in using nontraditional companies or payment methods, by generation, January 2021
- Gen Zers and Millennials most interested in usage-based insurance
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- Figure 36: Interest in usage-based insurance, by generation, January 2021
- …yet they remain skeptical about sharing data with their insurers
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- Figure 37: Interest in sharing home or auto data for discounts, by generation, January 2021
Personal Data and Telematics
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- A third of consumers would share their data to get a policy discount
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- Figure 38: Interest in telematics or smart home technology, January 2021
- Almost 30% of consumers would use smart technology to protect their property
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- Figure 39: Travelers teams up with Amazon, October 2018
Factors when Choosing a P&C Insurer
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- Quality customer service remains a key factor for 61% of consumers
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- Figure 40: Top factors when choosing a P&C insurer, January 2021
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- Figure 41: Top factors when choosing a P&C insurer, by generation, January 2021
- Digital capabilities are a low priority when choosing an insurer
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- Figure 42: Importance of digital capabilities through P&C provider, by generation, January 2021
- Nearly half of consumers look for bundling discounts from an insurer
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- Figure 43: Importance of discounts through P&C provider, by generation, January 2021
- 35% of consumers acknowledged receiving credit from their insurers during the pandemic
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- Figure 44: Knowledge of receiving a credit from P&C insurer during COVID-19, January 2021
- A third of Millennials would pay more for a policy if the company had a great reputation
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- Figure 45: Attitudes toward P&C insurers, by generation, January 2021
- Figure 46: P&C insurers’ share of social spend, January 2021
Appendix – Data Sources and Abbreviations
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- Data sources
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
- Terms
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