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The Evolution of Auto & Home Insurance in 2018
Tuesday, February 20, 2018 6:35 AM

Corrin Maier is the VP of Partner Management for CUNA Mutual Group

From Amazon and Alexa to Uber and Zillow, we don’t need to look far to see how technology and connectivity have changed our way of life, how we communicate, and how we do business. The auto and home (A&H) insurance industry is no exception. Regardless of whether your credit union currently offers A&H insurance, trends in the marketplace can help you evaluate, update, or implement new insurance offerings.

The biggest trend to watch in 2018 will be continued direct channel growth. Whether researching or purchasing insurance online or through a call center, a consumer’s desire to instantly fulfill their needs is driving the rapid and continued rise of direct channels. Access to smartphones is one factor driving this desire. As of today, 77 percent of adults in the United States now use a smartphone, a significant increase from just 35 percent in 2011.1 Geico and Progressive, two profit leaders that only sell in direct channels, are proof that the strategy works.

In addition to the direct channel growth, five other trends that will drive the evolution of A&H insurance in 2018 include:

  1. The prevalence of web and mobile as a research platform. Statistics show that 74 percent of insurance shoppers research online before they buy, yet only about 25 percent actually close the deal online.2 This gap signifies an opportunity for credit unions to better enable purchase completion.
     
  2. A continued desire to shop around. Better technology, like safety sensors in bumpers and windshields, and an increase in the frequency and severity of accidents are driving insurance prices up. A recent review found the cost to fix a fender bender of the same make and model almost doubled over just two years due to these additional sensors.3 Consumers are very price sensitive, and when premiums increase, the shopping starts. So, expect the year ahead to be a busy one for comparison shopping.
     
  3. Creating a one-stop member experience. Best practices generally recommend that drivers review their car insurance policy whenever it’s up for renewal (typically every six months to one year), and consumers typically compare quotes from at least three companies. The ability to provide comparison quotes for your members within a single experience delivers increased value to those you serve and helps them find the best product to meet their needs.
     
  4. The Internet of Things will further personalize pricing. In our data-driven world, anything and everything that tracks personal data could affect insurance. Smart devices have the potential to record data about everything from miles driven to acceleration and braking rates. New smart devices for the home, including thermostats and fire detection devices, could help decrease risk of serious damage, thereby offering insurers the opportunity to personalize pricing for policyholders.
     
  5. Momentum for ride sharing and autonomous cars will continue. Major shifts in how we approach transportation—either due to increases in ride sharing or the advancements of autonomous cars—have already created a demand for insurance products to meet these changes. As a result, we’ve seen insurance companies begin to innovate their products. One example is insurance that covers only the number of miles you drive or ride. You can expect continued innovation in auto insurance as this trend progresses.

Credit union members have many choices for how, when, and where they shop for insurance, in addition to many reasons why. Therefore, it’s vital for credit unions to stay relevant with their members’ insurance needs. From increasing your insurance marketing efforts to align with high comparison shopping rates to improving your online content to ensure it’s easy to use on any device and create stronger sales propositions and multiple channel choices for your members to use, the time is now to take another look at your A&H offering and how it can help you capitalize on these trends.

Corrin Maier is the VP of Partner Management for CUNA Mutual Group, the leading provider of insurance and financial services to credit unions and their members. In this role, Corrin is responsible for leading the strategic partnerships with Liberty Mutual, Esurance, and GoHealth, and ensuring credit union members get the protection they need. Contact her at corrin.maier@cunamutual.com.

CUNA Mutual Group is the marketing name for CUNA Mutual Holding Company, a mutual insurance holding company, its subsidiaries and affiliates. Corporate headquarters are located in Madison, Wis.

CUNA Mutual Group is a five-star endorses business partner of Credit Union Resources, Inc., a wholly owned subsidiary of the Cornerstone Credit Union League.

SOURCES:

  1. Pew Research Center, “Record shares of Americans now own smartphones, have home broadband,” January 12, 2017.
  2. J.D. Power, “2016 U.S. Insurance Shopping Study: Insurers Lean on Online Presence to Grow Premiums,” May 1, 2016.
  3. Moody’s Investors Services, Insurance Industry Overview, October, 2017.