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Property & Casualty Insurance - US - March 2020

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
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
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
Net premiums written tops $600 billion for P&C insurance industry
Figure 1: P&C insurance industry income analysis, in current dollars, 2014-2018
State Farm owns nearly 10% of all P&C insurance policies
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
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
Figure 4: Average premiums for homeowners and renters insurance, in current dollars, 2007-17
MARKET FACTORS
Overwhelming majority of consumers own a car
Figure 5: Vehicle ownership, November 2019
Homeownership rate hovers around 65%
Figure 6: Homeownership rate for the US, percent, annual, 2010-2019
Over 60% of renters have moved in the past year
Figure 7: Housing situation, January 2020
Figure 8: Housing situation – net, January 2020
Figure 9: American Family Insurance digital ad, September 2019
P&C INSURANCE AND TECH
Insurers are partnering with tech companies, and consumers are starting to pay attention
Interest in Smart Homes tech
Figure 10: Smart devices owned or considered, March 2019
Figure 11: Travelers smart home insurance mailer, March 2019
Consumers want their homes to be secure and comfortable
Figure 12: Interest in smart home technology, March 2019
Voice Assistants could get louder for P&C insurers
Figure 13: Smart speaker ownership, September 2019
Consumers are theoretically excited to start using a voice assistant
Figure 14: Attitudes toward digital voice assistants, September 2019
Consumer Attitudes Toward Technology are generally positive
Figure 15: Attitudes toward technology, August 2019
KEY PLAYERS – WHAT YOU NEED TO KNOW 
New insurtech: Openly
Climate change will continue to affect P&C claims
D2C comes to the insurance market
WHAT’S WORKING
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
Climate change will continue to affect P&C claims
CA steps up to combat discrimination in auto insurance
WHAT TO WATCH
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
Figure 16: Travelers wedding insurance tweet, September 2019
THE CONSUMER – WHAT YOU NEED TO KNOW 
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
Most US consumers have at least one policy; auto insurance most “popular”
Figure 17: Current property and casualty insurance ownership, January 2020
Fewer than half of renters own a renters insurance policy
Figure 18: Current property and casualty insurance ownership, by homeownership status, January 2020
BUNDLING
Most consumers prefer to keep policies with one insurer
Figure 19: Bundling behaviors, January 2020
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
Figure 22: Bundling behaviors, by generation, January 2020
Renters are nearly evenly split on the possibility of bundling
Figure 23: Bundling practices, by P&C policy type, January 2020
SWITCHING BEHAVIORS
Auto
Nearly a quarter of consumers have switched their auto policy in the last year
Figure 24: Likelihood to switch auto policies, January 2020
Younger consumers are the least loyal to their auto insurer
Figure 25: Likelihood to switch auto policies, by age, January 2020
Home
Switching is slightly less common among property owners
Figure 26: Likelihood to switch home or condo policies, January 2020
18-34s still chasing the more advantageous price point
Figure 27: Likelihood to switch home or condo policies, January 2020
Figure 28: Nationwide direct mail piece, November 2019
Renters
Nearly 40% of renters are switching their policies bi-annually
Figure 29: Likelihood to switch renters policies, January 2020
Figure 30: USAA digital ad, 2019
ATTITUDES TOWARDS SWITCHING INSURERS
Price, customer experience still most important
Figure 31: Leading causes of P&C insurance switching, January 2020
Mobile, online capabilities not considered “switchable” offenses
Figure 32: Motivation to switch due to mobile/online capabilities, by gender and age, January 2020
USAGE OF P&C INSURANCE CAPABILITIES
Mobile
Nearly 40% have downloaded their P&C insurer’s app, but age affects downloads
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
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
Figure 36: Interest in using nontraditional companies or payment methods, January 2020
Smart homes and telematics
Insurers should invest in future use
Figure 37: Interest in telematics or smart home technology, January 2020
CHOOSING A P&C INSURER
Outside of price, customer service remains most important
Figure 38: Top factors when choosing a P&C insurer, by age and gender, January 2020
Digitization is not a differentiator
Figure 39: Digital factors of P&C insurer selection, by generation, January 2020
ATTITUDES TOWARD PROPERTY AND CASUALTY INSURANCE
Half of consumers would recommend their P&C insurer
Figure 40: Willingness to recommend auto or homeowners/renters insurer, January 2020
Consumers are willing to share their information for a discount
Figure 41: Attitudes towards data sharing and paying more for a policy, January 2020
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Consumer survey data
Direct marketing creative
Abbreviations and terms
Abbreviations

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