Table of Contents
Executive Summary
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- The issues
- Insurance consumers are satisfied and loyal, making switching challenging
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- Figure 1: Insurance satisfaction, by type, August 2015
- Customer service trumps savings
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- Figure 2: Insurance satisfaction, claims and premiums, August 2015
- More consumers going online
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- Figure 3: Nontraditional insurance purchasing attitudes, August 2015
- The opportunities
- Young consumers seek better online and technology experiences
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- Figure 4: Insurance purchasing behaviors – Life insurance, by age, August 2015
- Combine technology with human element
- Embrace empowered consumers
- Majority of consumers want to be loyal to one brand
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- Figure 5: Insurance satisfaction, loyalty, August 2015
- What it means
The Market – What You Need to Know
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- Demand for insurance products strong
- Market forces signal continued need for insurance
- Interest rate environment key for life insurers
Market Breakdown
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- Life insurance premiums rebound, led by stock-market linked products
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- Figure 6: US life insurance premiums, 2009-14
- Number buying health insurance increasing
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- Figure 7: Percent of Americans without health insurance for the entire year, 2003-13
- Auto and homeowners/renter insurance premiums continue to grow
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- Figure 8: US property and casualty premiums, 2009-14
Market Factors
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- Many more insurance needs as unemployment nearing 5%
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- Figure 9: US unemployment, September 2009-15
- Number of first-time home buyers increases
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- Figure 10: Existing home sales, in millions of units, August 2014-15
- Auto sales on track for best year since 2000
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- Figure 11: Total US sales and fan chart forecast of market, at current prices, 2010-20
- Looming interest rate decision has impact on life insurance
Key Players – What You Need to Know
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- Online growth builds demand for consumer-focused user experience
- Usage-based insurance threatened by privacy concerns
- Amazon, Google, Walmart create alternative insurance channel
What’s Working?
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- Focusing on consumer, sites improve user experience
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- Figure 12: Oscar Health Insurance digital ad, 2015
What’s Struggling?
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- Privacy concerns keep usage-based insurance from gaining traction
- Current technology offerings not enough for young consumers
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- Figure 13: Reasons to shop around – Life insurance, by age, August 2015
- Young consumers open door to usage-based insurance opportunity
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- Figure 14: Insurance satisfaction, by age, August 2015
What’s Next?
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- Private exchanges rise following ACA
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- Figure 15: Public versus private exchange annual enrolment forecast, 2014-18
- Selling health insurance in retail stores
- Amazon, Google, Walmart threaten to enter insurance market
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- Figure 16: Nontraditional insurance purchasing attitudes, by race/Hispanic origin, August 2015
The Consumer – What You Need to Know
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- Policyholders are very satisfied with their insurer
- Customer service drives satisfaction
- Young consumers represent best market for new opportunity
- Savings opportunities via innovation is key to new markets
- More insurance purchasing being done online
- Men and Hispanics shopping via mobile devices
- Alternate insurance channels can also target men and Hispanics
Insurance Coverage
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- Some form of insurance owned by most consumers
- Insurance coverage increases with age
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- Figure 17: Type of insurance coverage – All, by age, August 2015
- High-income earners are opportunity for life insurance
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- Figure 18: Type of insurance coverage – All, by household income, August 2015
- Hispanics under index on insurance ownership
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- Figure 19: Type of insurance coverage – All, by race/Hispanic origin, August 2015
Method of Purchase
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- Insurance purchase experience can depend on type of insurance
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- Figure 20: Nontraditional insurance purchasing attitudes, August 2015
- Customer service can impact purchasing method
Method of Purchase – Life Insurance
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- Most buy life insurance from employer or agent
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- Figure 21: Insurance purchase method – Life insurance, August 2015
- Insurers can reach young men via financial advisors
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- Figure 22: Insurance purchase method – Life insurance, by gender and age, August 2015
- Direct mail still effective for Black audience
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- Figure 23: Insurance purchase method – Life insurance, by race/Hispanic origin, August 2015
Method of Purchase – Health Insurance
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- Nearly half receive health insurance via employer
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- Figure 24: Insurance purchase method – Health insurance, August 2015
- Blacks and Hispanics seek health insurance outside employer
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- Figure 25: Insurance purchase method – Health insurance, by race/Hispanic origin, August 2015
Method of Purchase – Auto Insurance
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- Online purchasing gaining traction from agents
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- Figure 26: Insurance purchase method – Auto insurance, August 2015
- 25-34-year-olds buying auto insurance online
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- Figure 27: Insurance purchase method – Auto insurance, by age, August 2015
- Blacks and Hispanics seek personal touch of agent
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- Figure 28: Insurance purchase method – Auto insurance, by race/Hispanic origin, August 2015
Method of Purchase – Homeowners/Renters Insurance
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- Most buy homeowners insurance through agent
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- Figure 29: Insurance purchase method – Homeowners/renters insurance, August 2015
Attitude toward Method of Purchase
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- Nontraditional insurers entering market
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- Figure 30: Nontraditional insurance purchasing attitudes, August 2015
- Alternate insurance channels can target men
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- Figure 31: Nontraditional insurance purchasing attitudes, by gender, August 2015
- Across all income groups, price still matters
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- Figure 32: Nontraditional insurance purchasing attitudes, by household income, August 2015
- Hispanics twice as likely to consider mass merchandiser for insurance
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- Figure 33: Nontraditional insurance purchasing attitudes, by race/Hispanic origin, August 2015
- Costs and options most important to young buyers online
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- Figure 34: Insurance purchasing attitudes, by age, August 2015
Insurance Behaviors
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- Customer service is universally important
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- Figure 35: Insurance purchasing behaviors – All, August 2015
Insurance Behaviors – Life Insurance
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- Technology important to next generation of life insurance customers
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- Figure 36: Insurance purchasing behaviors – Life insurance, by age, August 2015
- Parents can be won with discounts
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- Figure 37: Insurance purchasing behaviors – Life insurance, by presence of children, August 2015
Insurance Behaviors – Health Insurance
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- Few consumers filing claims online
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- Figure 38: Insurance purchasing behaviors – Health insurance, all, August 2015
- Young consumers may switch for savings without sacrificing service
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- Figure 39: Insurance purchasing behaviors – Health, by age, August 2015
- Saving parents money and time can be effective
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- Figure 40: Insurance purchasing behaviors – Health insurance, by presence of children in the household, August 2015
- Hispanics more likely to switch for discount
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- Figure 41: Insurance purchasing behaviors – Health insurance, by race/Hispanic origin, August 2015
Insurance Behaviors – Auto Insurance
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- Consumers looking for discounts in auto insurance
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- Figure 42: Insurance purchasing behaviors – Auto insurance, all, August 2015
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- Figure 43: Progressive Insurance mail ad, 2015
- Figure 44: Allstate Insurance email ad, 2015
- One in five Millennials buy auto insurance online
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- Figure 45: Insurance purchasing behaviors– Auto insurance, by generation, August 2015
- Insurers can save parents time with online purchasing
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- Figure 46: Insurance purchasing behaviors – Auto insurance, by presence of children, August 2015
- Hispanics more likely to interact with auto insurer online
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- Figure 47: Insurance purchasing behaviors – Auto insurance, by race/Hispanic origin, August 2015
Insurance Behaviors – Homeowners/Renters Insurance
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- Half of women value customer service
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- Figure 48: Insurance purchasing behaviors – Homeowners/renters insurance, by gender, August 2015
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- Figure 49: Insurance purchasing behaviors – Homeowners/renters insurance, by generation, August 2015
Reasons to Shop for New Insurance Policy
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- Reasons for a new life insurance
- High premiums causing consumers to shop around
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- Figure 50: Reasons to shop around – Life insurance, all, August 2015
- New life events key opportunity to engage with younger consumers
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- Figure 51: Reasons to shop around – Life insurance, by age, August 2015
Reasons to Shop for New Insurance – Health Insurance
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- Premiums on minds of all
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- Figure 52: Reasons to shop around – Health insurance, by household income, August 2015
- New technology and discounts can attract young consumers
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- Figure 53: Reasons to shop around – Health, by age, August 2015
- Hispanics having children present opportunity
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- Figure 54: Reasons to shop around – Health, by race/Hispanic origin, August 2015
Reasons to Shop for New Insurance – Auto Insurance
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- Customer service is a challenge for auto insurers
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- Figure 55: Reasons to shop around – Auto, all, August 2015
- Gen Xers most influenced by customer service
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- Figure 56: Reasons to shop around – Auto, by generation, August 2015
- Hispanics less concerned about customer service
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- Figure 57: Reasons to shop around – Auto, by generation, August 2015
Homeowners Insurance
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- Similar to auto insurance
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- Figure 58: Reasons to shop around – Homeowners/renters, all, August 2015
- Higher income earners more influenced by poor customer service
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- Figure 59: Reasons to shop around – Homeowners/renters, by household income, August 2015
Insurance Purchase Attitudes
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- Access to research and discounts makes agents valuable
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- Figure 60: Insurance purchasing attitudes, by method of purchase, August 2015
- Agents provide personal touch
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- Figure 61: Insurance purchasing attitudes, August 2015
- Affluent like efficiency of agents
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- Figure 62: Insurance purchasing attitudes, by household income, August 2015
- Men shopping via mobile devices
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- Figure 63: Insurance purchasing attitudes, by gender, August 2015
- Hispanics shopping via mobile devices are open to digital ads
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- Figure 64: Insurance purchasing attitudes, by race/Hispanic origin, August 2015
- Opportunity to reach young dads via mobile
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- Figure 65: Insurance purchase attitudes – CHAID – Tree output, August 2015
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- Figure 66: Insurance purchase attitudes – CHAID – Table output, August 2015
Insurance Satisfaction
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- Policyholders very satisfied overall
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- Figure 67: Insurance satisfaction, by type, August 2015
- Customer service can trump savings
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- Figure 68: Insurance satisfaction, claims and premiums, August 2015
- Majority of consumers want to be loyal to one brand
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- Figure 69: Insurance satisfaction, loyalty, August 2015
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Consumer survey data
- Consumer qualitative research
- Abbreviations and terms
- Abbreviations
Appendix – CHAID Analysis
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- Methodology
Appendix – Consumer Table
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- Figure 70: Insurance satisfaction, by type, August 2015
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