While Marshall McLuhan coined the phrase “the medium is the message” back in 1964, his hypothesis still resonates today when it comes to personal-lines insurance marketing in that the medium itself—not merely the message it delivers—has intrinsic value for consumers.
That’s one of the key conclusions that can be drawn from “The Voice of the Personal Lines Insurance Consumer,” a pair of online surveys by Deloitte Research that queried 1,080 auto policyholders and an equal number of those with homeowners’ coverage.
Indeed, the vast majority of respondents in both surveys said that the ability to interact with their insurers over a multitude of channels—in person or on the phone, over the Internet, through social media or via applications on their mobile smartphones—will be a major consideration when they make their next personal-lines policy purchase, regardless of how or from whom they buy their coverage.
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However, delving deeper into the importance of technology in personal lines revealed a generation gap, with younger respondents far keener on having multichannel options available. For example, the younger segments were at least twice as likely as older respondents to say they would change carriers to secure a number of online services.
In addition, while the use of smartphone applications is in its very early stages in insurance, younger respondents were much more enthusiastic about the need for them. (There was one glaring exception: When asked whether they would agree to have telematics technology installed to monitor their driving in return for a potential auto-premium discount, the younger the respondent, the less open they were to the idea.)
Twenty-eight percent of auto buyers surveyed said having multiple touchpoint options to communicate with their insurer was an extremely or very influential factor the last time they changed carriers. Age was a big differentiator, as 42 percent of those 18-25 and 46 percent in the 26-34 segment listed this element as extremely or very influential, compared with 26 percent of those 35-50 and only 21 percent among respondents over 50.
More importantly, looking ahead, 84 percent of auto-insurance respondents said having multiple touchpoint options would influence their decision when they next shop for coverage (including 59 percent who cited this as an extremely influential factor prospectively), with each of the age groups marking this as a highly ranking consideration.
Indeed, with price being equal, 41 percent of the auto respondents said they would be very likely (15 percent) or likely (26 percent) to change carriers to secure the ability to communicate in multiple ways with their insurers. However, that figure jumps to 50 percent among those 18-34, compared to only 31 percent for those over 50.
Homeowners showed a similar disparity among age segments, with 31 percent overall indicating that having multiple options to communicate with their insurer was extremely (11 percent) or very (20 percent) influential the last time they decided to change carriers. Broken down by age group, 51 percent of those 18-25 and 44 percent in the 26-34 segment wanted multiple communication options, but only 19 percent among respondents over 50 indicated this was influential.
Prospectively among homeowner respondents, however, there was much less enthusiasm overall for this element (23 percent)—although again age is a key factor, with the response jumping to 40 percent among those 18-25 and 35 percent for those 26-34, compared to only 14 percent for buyers over 50. Price being equal, 42 percent of homeowner respondents said this would be a very influential factor in their next purchase decision—rising to 55 percent among those 18-24 and 51 percent for those 25-34, compared to only 34 percent for the over-50 crowd.
When it comes to Web-based services, among those features rated as extremely or very useful to auto buyers surveyed (cited by nearly three-fourths of respondents) was the ability to check on the status of a claim, get information about products and services, and secure price quotes. The second tier of responses (cited by about two-thirds of respondents) focused on renewing a policy, updating account information, locating an insurer-recommended repair facility, paying a bill, contacting an agent or finding one nearby, and submitting a claim online.
The third tier (named by more than half of respondents) cited insurance-card access and policy information, the ability to cancel a policy, and getting information on coverage besides auto. Among the Web services rated as very or extremely useful by fewer than half of those surveyed were options such as online-chat capabilities to clarify coverage or claims questions; the ability to share accident or claims experience with other policyholders; and the ability to view videos on safety, security and maintenance.
The individual percentages were slightly different among homeowner respondents, but the online-service-preference rankings were closely aligned with those of auto-insurance buyers.
Meanwhile, mobile applications are being introduced by a growing number of personal-lines insurers—but such options were not yet on the radar for most of those responding to these surveys. Indeed, three out of four auto and homeowner respondents didn’t even know whether their carrier offered mobile apps.
However, those who do use insurer mobile apps like them a lot. Among auto respondents, about 25 percent found them to be extremely useful, and an additional 33 percent said they are very useful. Age again is a major factor, with younger consumers more likely to find the apps useful. The numbers are similar among homeowner respondents.
Still, mobile apps are not yet a game-changer among these survey samples. At this point, only about one in 10 of both samples indicated they would be likely to change insurers based on the availability of smartphone apps. However, that percentage is likely to rise as more apps are introduced and more consumers come to depend on smartphones to conduct their everyday business.
Similarly, the use of social-media sites to share information and maintain more regular contact between insurers and policyholders is also in the embryonic stage. Only one in five of those surveyed said their auto or homeowner insurers provide information over social media. Since most carriers already have social-media platforms in place, the challenge facing insurers is to make policyholders more aware of the existence and value of such options.
Once again, however, a significant number of those who did receive information from their insurer via social media liked what they received (around 25 percent found such information very useful, while 13-15 percent found it extremely useful), although overall the enthusiasm for receiving insurance information via social media was weaker than it was for mobile applications.
Age was a significant point of distinction here as well, particularly among auto respondents, with 56 percent of those 18-25 finding insurer information delivered via social media to be extremely (16 percent) or very (40 percent) useful, compared to 35 percent among those 35-50 and only 8 percent of those over 50.
The two surveys indicate that while those who are aware of these emerging communication capabilities remain in the minority for now, it is an enthusiastic and highly satisfied minority. As awareness increases, tech-savvy consumers are likely to demand more service options from insurers delivered via their laptops, notebooks, tablets and smartphones.
In my next blog, I’ll explore additional factors that drove respondents to decide whether to go with, or stay with, a particular personal-lines insurer. The results indicate that while price is the biggest influencer, there are a number of other important considerations when buyers shop for auto and homeowners’ insurance.
(We welcome your feedback and questions throughout this series of articles. You may download the full report on “The Voice of the Personal Lines Insurance Consumer” from Deloitte Research at http://www.deloitte.com/view/en_US/us/Industries/Insurance-Financial-Services/a0f93dffd16f5310VgnVCM2000001b56f00aRCRD.htm.)