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Few issues are the identical as they had been in the beginning of 2020, and that features the auto insurance coverage business. The COVID-19 pandemic has made most insurance coverage companies reexamine how they take care of their clients and streamline their companies. As a Michigan-based insurance consultant, Peter Vitale works with small unbiased company house owners recurrently. They’ve shared their experiences during the last yr or so with him, rendering Vitale significantly in a position to communicate on this subject. Right here’s what he needed to say concerning the pandemic, the auto insurance coverage business, and evolving customer support:
Methods the pandemic has modified the auto insurance coverage business (the great, the dangerous and the merely uncommon)
To say that the final yr or so has been uncommon can be an understatement. There isn’t any business that hasn’t felt the affect of the COVID-19 pandemic. The auto insurance coverage enterprise isn’t any exception. A number of the adjustments within the business might have been foreseen; nevertheless, many got here out of left discipline. Right here’s Peter Vitale’s evaluation of the adjustments we’ve seen within the auto insurance coverage enterprise for the reason that pandemic started.
1. A extra aggressive market.
A study by JD Powers discovered that whereas shoppers had been driving 55 p.c fewer miles and the US unemployment charge touched 15 p.c in 2020, auto insurance coverage policyholders had been procuring round in document numbers. Additionally they discovered that whereas corporations have been working to distinguish themselves from different auto insurance coverage corporations, shoppers see the distinction as primarily value. That’s not excellent news for auto insurers. Competing solely on value is rarely a good suggestion, since there’s all the time an organization keen to scale back their value till nobody is making any cash.
2. Extra consideration to customer support.
As shoppers have turn into extra inclined to buy round for his or her auto insurance coverage and because the economic system has turn into extra aggressive, insurance coverage companies that promote auto insurance coverage have been pressured to pivot and look extra carefully at their customer support efforts. Savvy brokers and insurance coverage executives, like Peter Vitale, are looking at ways to make the process of buying an auto insurance policy easier. For instance, as an agent, you might have already got plenty of details about your clients. Why make them reply the identical questions time and again? After all, insurance coverage professionals must reassure clients that their private info will stay confidential.
3. A very good deed unrewarded.
Auto insurance coverage carriers returned an unprecedented $18 billion in auto insurance coverage premiums (that’s about seven p.c of whole business premiums) to shoppers in 2020 as a result of individuals had been driving many fewer miles. Nonetheless, lower than half of the auto-buying public was conscious of this transfer, in response to the JD Energy examine.
4. Fewer, however worse drivers
Whereas America’s roads had been nearly empty throughout most of 2020, the drivers who had been on the highway had been extra reckless. A LexisNexis Auto Insurance coverage Tendencies Report discovered that accidents on account of excessive speeds elevated by 10 p.c from 2019, for the interval from mid-March via the tip of the yr. As well as, DUI arrests amongst youthful drivers elevated by a whopping 50 p.c from the earlier yr in the course of the interval from Mid-March via the tip of April, 2020, and collision severity elevated by 3.7 p.c year-over-year improve in 2020.
5. Artistic auto insurance policies
By-the-mile auto insurance coverage insurance policies turned extra enticing in 2020, as policyholders had been garaging their autos and dealing from house. For instance, Liberty Mutual provides a “ByMile” coverage the place drivers pay a small, fastened month-to-month payment plus a per mile payment (with a cap at 150 each day, in order that highway journeys don’t turn into ridiculously costly). The corporate claims that policyholders saved between 25 and 40 p.c on their premiums, as in comparison with a standard coverage, even earlier than the pandemic started.
What do these developments imply for the longer term?
The subsequent few years will doubtless be difficult for auto insurance coverage corporations and brokers who promote auto insurance coverage. Nonetheless, the excellent news is that the auto insurance coverage business is mostly much less affected by economic downturns (and upturns) than different segments of the insurance coverage business. That offers auto insurance coverage companies considerably of a stable basis on which to construct their future.
Maybe the largest alternative for brokers and company house owners is to construct on the customer support strides they’ve made prior to now yr or so. After a dialogue has been established with clients, it’s going to be simpler to proceed interacting with them. Now’s undoubtedly not the time to chill out communication and outreach efforts.
This post-pandemic interval can also be a superb time for brokers to make good use of social media. Fb, Twitter and different social media platforms are wonderful locations to speak new customer-based providers and business adjustments. These platforms are additionally a superb place to gauge clients’ response to new services. Ensure that to watch posts recurrently, nevertheless. Nobody likes a one-sided dialog.
There may be additionally a chance for brokers who’re open to new merchandise, similar to auto insurance policies pushed by telematics that monitor a policyholder’s driving abilities or by-the-mile insurance policies. As a substitute of ready for purchasers to ask for these merchandise, provide them to clients who might most profit from them.
About Peter Vitale
Michigan’s Peter Vitale has spent more than a decade within the auto insurance coverage enterprise. He has been a profitable agent and the proprietor of an award-winning Allstate unbiased company. Immediately, he’s an insurance coverage guide, serving to small and medium-sized unbiased insurance coverage companies achieve success. Peter Vitale additionally owns the Bloomfield Insurance coverage Group in Bloomfield Hills, Michigan. Vitale graduated from Michigan’s Oakland College with a Bachelor of Enterprise Administration diploma and nonetheless lives within the Oakland County neighborhood the place he grew up. When he’s not working, he’s actively concerned in neighborhood affairs and sits on the Board of the Japanese Michigan Higher Enterprise Bureau.