Encouraging Loyalty Among Insurance Buyers

Consumers value the knowledge offered by insurance agents, as well as the relationships they develop with them personally and, by extension, the insurance company they represent. Since insurance claims are only made in times of stress, companies that make customers feel they are cared for – and taken care of – stand the best chance of retaining their customers in the long term.

Mintel’s Property and Casualty Insurance US 2015 report shows that 25% of those who have property and casualty insurance have switched auto insurance in the past two years. Some 16% have switched their homeowners and 23% have switched their renters insurance. Most people switch because of price, whether it was because another company was initially less expensive (34%), the previous insurer raised the price at renewal time (24%), or another company offered a discount for bundling (14%).

Here are four ways we think property and casualty, or P&C, insurance carriers can encourage customer loyalty:

1. Bundling – Because fewer people switch homeowner’s insurance providers than auto insurance providers, offering bundling discounts may help retain customers by making it difficult for them to switch providers for one type of insurance and not the other.

2. Better communication – Only 31% of respondents to Mintel’s Property and Casualty Insurance US 2015 report are satisfied with how often their P&C provider communicates with them. Some 42% would like to hear from their providers offering to review their policy just prior to renewal. Some 56% believe that having a personal relationship with an insurance agent is the most important factor in purchasing a policy. Developing and strengthening that relationship will help insurers identify concerns before they become problems and help avert any switching that might occur.

3. Telematics and Email/text alerts – While the use of telematics may help lower auto insurance premiums, it may also encourage loyalty if tips for safer driving based on the results of telematics are also provided. Parents of teens may especially appreciate such tips as teenagers tend to listen more to sources of information other than their parents. Sending these tips to drivers in an email or a text will remind them immediately that their driving habits need to be adjusted if they expect to see a lower auto premium bill. Promoting this feature alongside the discount benefit will help customers see how staying with the provider can pay off in both cost and in staying safer on the road.

4. Loyalty program – Some 13% of all respondents switched auto insurance providers to take advantage of a loyalty program offered elsewhere. This jumped to 17% of Millennials and 18% of Hispanics. Creating a loyalty program that offers points earned for telematics-monitored safe driving would help keep some of these customers. Eventual “prizes” could be a discount off auto or homeowner premiums (which may be of special benefit to attract new homeowners customers) or even a gift card.