Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- The issues
- Property and casualty insurance is a saturated market
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- Figure 1: Insurance ownership, by generation, December 2017
- Men and Millennial consumers are most likely to switch P&C insurers
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- Figure 2: P&C switching behaviors, by gender and generation, December 2017
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- Figure 3: Auto switching behavior, by generation, December 2017
- The opportunities
- Consumers are receptive to mobile solutions and new technologies
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- Figure 4: P&C behaviors, mobile phone/app use, by generation, December 2017
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- Figure 5: P&C behaviors, by race/ethnicity, December 2017
- Most renters do not have renters insurance
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- Figure 6: Insurance ownership, by housing situation, December 2017
- Usage-based policies are gaining in popularity
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- Figure 7: P&C preferences, by generation, December 2017
- Consumers are receptive to insurance inclusion in property prices
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- Figure 8: P&C behaviors, interest, by generation and parental status, December 2017
- What it means
The Market – What You Need to Know
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- Net income in P&C industry dropped 30% in first nine months of 2017
- Premiums continue to climb
- 2017 car sales fall for first time since 2009
- State Farm remains the largest P&C insurer
- Average homeowners and auto expenditure rising, renters flat
Market Size
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- Industry financials
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- Figure 9: P&C insurance industry income analysis ($ billions), 2012-16
- P&C industry net income dropped 30% in first nine months of 2017
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- Figure 10: P&C insurance industry income analysis ($ billions), 2016-17
- Premiums continue to climb
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- Figure 11: Net premiums written, 2006-16
- Largest P&C insurers
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- Figure 12: Top 10 writers of property and casualty insurance, by direct premiums written, 2016
- Largest P&C direct mailers
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- Figure 13: Top 10 property and casualty insurers, by direct mail offers sent, 2016
Market Breakdown
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- Auto
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- Figure 14: Average auto insurance expenditure and change from prior year, 2006-15
- Figure 15: Top 10 writers of private passenger auto insurance, by direct premiums written, 2016
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- Figure 16: Incurred losses for auto insurance*($000), 2011-16
- Homeowners and renters
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- Figure 17: Average premiums for homeowners and renters insurance, US, 2006-15
- Figure 18: Top 10 writers of homeowners insurance, by direct premiums written, 2016
Market Factors
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- Rates of driving and crashing are both on the rise
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- Figure 19: Traffic volume trends, vehicle-distance traveled, 1993-2017
- Figure 20: Total police-reported motor vehicle crashes, 1989-2015
- Vehicle sales dip, rebound through 2017
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- Figure 21: Light weight vehicle sales: autos and light trucks, 2008-18
Key Players – What You Need to Know
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- Insurtech poised to disrupt P&C industry
- Telematics drive auto policy efficiency forward
- Drones: both tool and liability
- Artificial intelligence on the horizon
What’s Working?
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- Insurtech
- Metromile: a case study in Insurtech innovation
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- Figure 22: Metromile, direct mail campaign, February 2018
- Telematics
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- Figure 23: Nationwide, email campaign, December 2016
- Allstate: Drivewise & Allstate Rewards
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- Figure 24: Allstate, email campaign, June 2017
What’s Struggling?
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- Utilizing big data presents numerous hurdles
- Distracted driving poses a serious risk
- The sharing economy poses challenges and opportunities
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- Figure 25: Uber and State Farm, email campaign, January 2018
- Figure 26: Plymouth Rock, email campaign, November 2017
What’s Next?
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- Big data will continue to shape the evolution of the industry
- Technology companies will throw their hats in the insurance ring
- Artificial intelligence
- Slice provides on-demand homeshare insurance
- Drones: the insurer and the insured
The Consumer – What You Need to Know
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- Most consumers have at least one property and casualty policy
- Many renters do not own renters insurance
- Consumers warming to role of mobile in P&C
- Satisfaction, trust, and price drive P&C loyalty
- Usage-based policies enjoy wide generational popularity
Insurance Ownership
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- Property and casualty insurance is widely held
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- Figure 27: Insurance ownership, by generation, December 2017
- Home-owning consumers are much more likely to have auto insurance
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- Figure 28: Insurance ownership, by housing situation, December 2017
- Figure 29: State Farm, direct mail campaign, January 2017
- Most renters do not own renters insurance
- Multiple P&C policies with one insurer is the norm
- Male and Hispanic consumers use multiple insurers
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- Figure 30: Insurance ownership, multiple policies per company, by area, December 2017
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- Figure 31: Insurance ownership, multiple policies per company, by gender and Hispanic origin, December 2017
- Consumers cite price and efficiency in bundling decision
Switching Behaviors
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- Auto insurance
- Men are more likely to plan to switch auto insurers
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- Figure 32: Auto switching behavior, by gender, December 2017
- Millennials and iGen consumers switch more, and plan to continue doing so
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- Figure 33: Auto switching behavior, by generation, December 2017
- Home insurance
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- Figure 34: Homeowners switching behaviors, by gender and area, December 2017
- Renters insurance
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- Figure 35: Renters switching behaviors, by generation, December 2017
- Impact of price on switching
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- Figure 36: Progressive, direct mail campaign, January 2018
- Figure 37: Farmers Insurance, direct mail campaign, January 2018
- Figure 38: GEICO, direct mail campaign, September 2017
Factors that Influence P&C Loyalty
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- Satisfaction and trust top the list
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- Figure 39: P&C loyalty, influencing factors, by generation, December 2017
- Lower prices and bundling are compelling reasons to stay
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- Figure 40: P&C loyalty, influencing factors, December 2017
- Mobile and online capabilities are important to younger generations
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- Figure 41: P&C loyalty, influencing factors, by generation, December 2017
- Qualitative survey responses echo importance of cost factor
Attitudes toward Insurance
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- Many consumers believe “insurance companies are all the same”
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- Figure 42: Attitudes toward insurance and insurance companies, by demographics, May 2017
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- Figure 43: Progressive email campaigns, February-July 2017
- Consumers have high demands, but little praise
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- Figure 44: Attitudes toward insurance and insurance companies, by generation, December 2017
Technology and the Future of P&C
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- Mobile is becoming a prominent P&C interface...
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- Figure 45: P&C behaviors, mobile phone/app use, by generation, December 2017
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- Figure 46: P&C behaviors, purchasing a policy via mobile app, by generation, December 2017
- Technological innovations are not yet a reason to switch
- Consumer sentiment varies widely regarding role of mobile
- Consumers are interested in tech and startup solutions...
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- Figure 47: P&C behaviors, by race/ethnicity, December 2017
- ...although significant skepticism remains
- Consumers want usage-based policies
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- Figure 48: P&C preferences, by generation, December 2017
- Consumers are receptive to insurance inclusion in property prices
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- Figure 49: P&C behaviors, interest, by generation and parental status, December 2017
Appendix – Data Sources and Abbreviations
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- Consumer survey data
- Consumer qualitative research
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
Appendix – The Market
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- Identity theft protection
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- Figure 50: Identity theft and fraud complaints, 2013-16
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