Auto Insurance Game Changer #5: Offering Policyholders Safety
While an increase in smartphone ownership has introduced problems in auto insurance, advancements in telematics technology are revolutionizing auto insurance and its role in the mobile world today. This five-part blog series addresses the problems facing auto insurance and the Game Changers solving them.
Game Changer #1: Leveling up with Artificial Intelligence and IoT
Game Changer #2: Assessing Phone Distraction
Game Changer #3: Methods to Motivate Safe Driving
Game Changer #4: Using Telematics in Claims
Problem: How can insurers retain policyholders and better build brand loyalty?
According to a 2019 analysis by J.D. Power, auto insurance brand loyalty is declining. In 2004, 59% of consumers would “definitely renew,” and in 2019, the number dropped to 48%.
Consumers can now shop and purchase new policies completely online, and quickly. In one sitting, they can compare quotes and purchase a new policy through a website or smartphone app. This improves the customer experience, but also means auto insurers can no longer rely on brand loyalty to acquire and retain customers. They have to offer value-add services that will make them stand out from their competitors.
Connected Insurance enables insurers to provide solutions that better engage customers and improve the customer experience, as well as offer the safety services drivers want for them and their families.
According to a 2019 survey commissioned by CMT, 83% of U.S. drivers would be more interested in an insurance company’s products if it offered tools to help keep the driver’s family safer on the road.
When asked which family safety features they would like their auto insurers to offer through their mobile app, 78% said emergency roadside assistance that automatically calls for help following an accident, 23% said trip-by-trip safe driving feedback, and 22% said family scoreboards that foster healthy safe-driving competitions.
Today, with smartphone telematics, auto insurers can provide policyholders these safety features in addition to other value-added services like incentives for safe driving and faster claims. Offering policyholders more than coverage in their policy increases competitive advantage, and strengthens the insurer-policyholder relationship, ultimately improving customer retention and acquisition.
Game Changer: Consumers want safety solutions to be a part of their policy, and Connected Insurance solutions, powered by smartphone telematics, allows insurers to offer them. This can improve retention at a time when auto insurance brand loyalty is on the decline.