What do Auto Insurance Customers Want? More than Low Rates.

auto-insuranceCompeting on price isn’t a new idea. In fact, it’s kind of how capitalism works, right? When lots of competitors aim to offer the best deal on the same product or service, prices stay reasonable and customers benefit. In theory.

But price isn’t all that counts.

When JD Power conducted its annual Insurance Shopping Study, Forbes said, it found that drivers who switched insurers did save. However, savings are only one point among many that customers should consider when making such a decision.

“When looking exclusively at price, consumers may find the grass is not always greener,” said Valerie Monet of JD Power. It’s “the day-to-day interactions they have with their insurer, especially if they have to file a claim that will be the ultimate moment of truth for the customer.” It’s one thing to rate-hunt and find the very best deal. It’s another to have to live with it.

Younger customers care about more than just price discounts.

Research shows that millennials care less about price than boomers, and since there are 80 million millennials in the U.S. (about a quarter of the population) holding $200 billion in buying power, that’s an important detail. So much in fact, Forbes said that 2015 is “the year of the millennial customer.”

What do they care more about? These customers believe that a user-friendly website, good service, a variety of value-added perks, fairness and transparency are worth paying for. They’re not willing to put up with frustration – or even a neutral value – in return for rock-bottom rates.

 They want an experience.

Of course, excellent service is a good place to start. When shopping insurers, JD Power advised customers to look for “clear, effective communication about policy options throughout the shopping experience – whether through interactions with staff or through tools and information on their website.”

But that’s really just the beginning. Beyond the basics, insurers need to innovate the customer experience from the ground up. Allstate set a good example with its Allstate Rewards program, which lets safe drivers earn points “for deals on merchandise, gift cards and local offers, regardless of whether they have an insurance policy with Allstate,” according to Insurance Networking News.

It bears repeating: participants don’t have to be Allstate customers. All they have to do is drive safely. And it goes further. The Allstate Drivewise app includes game-like challenges offering points in exchange for safe behavior, like staying under 80 mph or not braking hard for three consecutive days.

This is the difference between merely slashing prices on one hand, and creating an experience on the other. “We’re providing cutting-edge capabilities to better serve drivers and protect what matters to them most,” said Ginger Purgatorio at Allstate.

More and more, customers are thirsty for experience. And they’re willing to pay for it. For auto insurers who are willing to innovate relevant offerings in response, that’s exciting news indeed. Find out how smartphone telematics facilitates a better insurance experience and download our latest white paper here.


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