Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- The issues
- Mobile is not being used
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- Figure 1: Use of mobile apps, October 2016
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- Figure 2: GEICO garage email ad, 2016
- Consumers need help understanding their policies
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- Figure 3: Understanding of policy, by generation, October 2016
- Few would recommend their insurance provider
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- Figure 4: Understanding of policy, by gender and age, October 2016
- The opportunities
- Few Millennials are confident they have the right insurance
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- Figure 5: Believe they have the right insurance, by generation, October 2016
- Reaching Hispanics with agents
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- Figure 6: Attitudes toward insurance and insurance providers, by Hispanic origin and generation, October 2016
- Education can be a differentiating factor
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- Figure 7: Attitudes toward insurance and insurance providers, by gender, October 2016
- Most are satisfied with their providers, but few would recommend
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- Figure 8: Attitudes toward insurance and insurance providers, by generation, October 2016
- Bundled products appeal to women
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- Figure 9: Factors in choice of policy, by gender, October 2016
- What it means
The Market – What You Need to Know
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- Industry financials show a mixed bag
- Unemployment is still low
- Continued development of self-driving cars
- More driving means more crashes
- New home sales are increasing
Market Size
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- Industry Financials
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- Figure 10: Industry financials, H1 2015 vs H1 2016 (in billions)
- Premiums
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- Figure 11: Net written premiums, 2006-15
- Top ten writers of P&C insurance
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- Figure 12: Top ten writers of property and casualty insurance, by direct premiums written, 2015
Market Breakdown
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- Auto insurance industry is being challenged
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- Figure 13: Incurred losses for auto insurance*, 2011-15, (000s)
- Top ten writers of private passenger auto insurance
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- Figure 14: Top ten writers of private passenger auto insurance, by direct written premiums, 2015
- Homeowner premiums increase while renters premiums go down
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- Figure 15: Average premiums for homeowners and renters, US, 2004-13
- Top ten writers of homeowners insurance
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- Figure 16: Top ten writers of homeowners insurance, by direct premiums written, 2015
Market Factors
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- Unemployment is still low
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- Figure 17: Unemployment rate, January 2012-October 2016
- Self-driving cars
- More driving, more crashes
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- Figure 18: Number of crashes, 2005-14
- New home sales are increasing
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- Figure 19: New home sales (seasonally adjusted), Sept. 2015-Sept. 2016
Key Players – What You Need to Know
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- Drones
- Telematics
- The “sharing economy” is a challenge
- Appealing to Millennials
- Verifly – Insurance for drones
- What happened to privacy concerns?
What’s Working?
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- Drones
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- Figure 20: Reason for switching insurers, by household income, October 2016
- Telematics
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- Figure 21: Interest in new products and services, by generation, January 2015
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- Figure 22: Progressive Snapshot ads, 2016
What’s Struggling?
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- The “sharing economy” is a challenge
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- Figure 23: Allstate email ad, 2015
What’s Next?
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- Targeting Millennials
- Root – One-stop car insurance shopping
- Lemonade – Peer-to-peer insurance
- Meet Margo
- Slice – For home sharing hosts
- Verifly – Insurance for drones
- Using social media to reduce premiums – but what about privacy?
- Will auto insurers sell the data they collect?
P&C Insurance Email Performance
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- USAA is the most frequent emailer
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- Figure 24: Volume of marketing emails delivered, June 1, 2016-November 30, 2016
- Figure 25: Average email read rate by select companies, June 1, 2016-November 30, 2016
- What gets read the most?
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- Figure 26: USAA email: “Hurricane Matthew,” projected volume 422,000
The Consumer – What You Need to Know
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- Most consumers have at least one property and casualty policy
- Switching behaviors vary with consumer segment and type of insurance
- Price is primary switching motivator
- Most prefer to communicate via phone
- Cost is most important
- Young consumers more likely to use mobile
- Most have positive attitude about own provider
- Agents are important to Hispanics and parents
Insurance Ownership
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- Most consumers have at least one property and casualty policy
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- Figure 27: Insurance ownership, by generation, October 2016
Switching Behaviors
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- Auto
- Male auto insurance owners are more likely to switch
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- Figure 28: Auto switching behavior, by gender, October 2016
- Millennials are most likely to switch
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- Figure 29: Auto insurance switching plans, by generation, October 2016
- Hispanic customers at risk of switching
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- Figure 30: Auto insurance switching plans, by Hispanic origin, October 2016
- Homeowners
- Men more likely to switch
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- Figure 31: Homeowners insurance switching plans, by gender, October 2016
- Parents more likely to switch homeowners insurance
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- Figure 32: Homeowners insurance switching plans, by parental status, October 2016
- Urban dwellers are switching
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- Figure 33: Homeowners insurance switching plans, by area, October 2016
- Renters
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- Figure 34: Renters insurance switching plans, by generation, October 2016
- Higher-income renters are switching
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- Figure 35: Renters insurance switching plans, by household income, October 2016
Reasons for Switching
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- Price is key
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- Figure 36: Reasons for switching, October 2016
- Increasing prices at renewal chases older consumers away
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- Figure 37: Reasons for switching, by generation, October 2016
- Renters insurance owners more likely to value digital capabilities
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- Figure 38: Reasons for switching, by insurance ownership, October 2016
- Price is most important to lowest income
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- Figure 39: Reasons for switching, by household income, October 2016
- Renters insurance owners more likely to switch for better technology
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- Figure 40: Reasons for switching, by insurance ownership, October 2016
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- Figure 41: Farmers Insurance email “Three suggested actions prior to your renewal,” projected volume 732,000
Communication Preferences
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- Phone is preferred
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- Figure 42: Communication preferences, October 2016
- Personal phone contact is more important than electronic contact
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- Figure 43: Communication preferences, by attitudes toward insurance and insurance companies, October 2016
Factors in Provider Choice
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- Cost is most important
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- Figure 44: Factors in choice of policy, October 2016
- Women more likely to look at cost
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- Figure 45: Factors in choice of policy, by gender, October 2016
- Technology and accessibility more important to Hispanics than to non-Hispanics
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- Figure 46: Factors in choice of policy, by Hispanic origin, October 2016
- Income influences choice
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- Figure 47: Factors in choice of policy, by household income, October 2016
Use of Mobile Apps
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- Renters insurance owners more likely to use mobile
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- Figure 48: Mobile purchase and filing behavior, by insurance ownership, October 2016
- Men are more likely to use insurance mobile apps
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- Figure 49: Use of mobile apps, by gender, October 2016
- Millennials most likely to access policies through mobile apps
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- Figure 50: Use of mobile apps, by generation, October 2016
- Mobile purchasing and filing behaviors
- Millennials are more likely than older consumers to purchase policies via mobile app
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- Figure 51: Mobile purchase and filing behavior, by generation, October 2016
- Hispanics are more likely to buy via mobile device
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- Figure 52: Mobile purchase and filing behavior, by Hispanic origin, October 2016
- Parents like to purchase via mobile apps
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- Figure 53: Mobile purchase and filing behavior, by parental status, October 2016
Attitudes toward Insurance and Insurance Companies
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- Renters insurance owners most likely to understand products
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- Figure 54: Attitudes toward insurance and insurance companies, by insurance ownership, October 2016
- Satisfaction and trust in own provider are high
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- Figure 55: Attitude toward insurance and insurance companies, by insurance ownership, October 2016
- Millennials are most positive about the industry
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- Figure 56: Attitudes toward insurance and insurance companies, by generation, October 2016
- Agents are important to Hispanics
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- Figure 57: Attitudes toward insurance and insurance companies, by Hispanic origin, October 2016
- Agents need to address parents
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- Figure 58: Attitudes toward insurance and insurance companies, by parental status, October 2016
- Women need more education about insurance
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- Figure 59: Attitudes toward insurance and insurance companies, by gender, October 2016
- How important is price?
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- Figure 60: Attitudes toward insurance and insurance companies, by generation, October 2016
- Reputation is less important to lower-income consumers
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- Figure 61: Attitudes toward insurance and insurance companies, by household income, October 2016
Cluster Analysis
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- Figure 62: Insurance owner clusters, October 2016
- Cluster 1: Industry Loyalists
- Demographics
- Characteristics
- Opportunity
- Cluster 2: Independents
- Demographics
- Characteristics
- Opportunity
- Cluster 3: Satisfied Skeptics
- Demographics
- Characteristics
- Opportunity
- Cluster 4: Provider Loyalists
- Demographics
- Characteristics
- Opportunity
- Cluster 5: Dissatisfied Doubters
- Demographics
- Characteristics
- Opportunity
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Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Consumer survey data
- Direct marketing creative
- Email creative
- Abbreviations and terms
- Abbreviations
- Terms
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