Policyholders want more engagement but on their own terms
Auto insurers can boost customer retention by communicating to insureds with the right message at the right time, says LexisNexis.
Although nearly all agents (94%) who participated in the recent Agent Authority research from Nationwide believe they are checking in regularly with their clients, only 69% of their customers agree. That statistic shows a clear perception gap between insurance agents and insureds while highlighting the need for more effective communication strategies from insurers.
Now, a new study from LexisNexis Risk Solutions illuminates how auto insurers can improve engagement with policyholders. The 2020 U.S. Auto Insurance Consumer Shopping Study reveals that policyholders want to hear from their auto insurance carrier more often. The caveat: customers want communication on their own terms.
“With easy-to-use websites, mobile apps and always-on call centers, it’s easier than ever to shop for insurance policies, and consumers are actively taking advantage ― both on and off policy cycle,” says Ian Griffin, director of product management at LexisNexis Risk Solutions and author of the study’s report. “It’s encouraging to know that customers are willing to listen, but effective outreach is a balancing act, and you need to make sure you have the right listening and communication strategies in place to avoid attrition, and ideally build customer loyalty.”
Timing matters
LexisNexis found that policyholders are eager to hear about pricing and discounts related to their policies, but the conversation should not end there. Information about additional coverage and bundling is of interest to more than 30% of customers, while 29% said they appreciate the opportunity to communicate with their insurers to provide feedback. Seventy-four percent of the study’s respondents also reported they want to hear from their carrier at renewal in addition to the renewal notice.
Insurers also should pay attention to customers’ life events that impact shopping and decision-making. In a 2019 LexisNexis study, half of the respondents who recently experienced a major life event said the event affected their decision to shop for their auto insurance. “Knowledge of consumer life changes gives carriers significant opportunities to expand coverage with current policyholders and further establishes the carrier as a trusted advisor,” writes Griffin.
Understanding customer preferences
Ninety percent of customers across all generations said they prefer to be contacted by email. However, the second-most preferred communication method differs between groups, with millennials choosing mobile apps, and Gen Xers and Baby Boomers preferring phone calls.
Other findings include:
- 49% of policyholders said it’s appropriate for their carrier to contact them within two to five days of them receiving a competitor’s quote; 68% noted that one contact post-quote is enough.
- 47% of policyholders who switched to a new carrier said their existing carrier’s failure to reach out influenced their decision to switch.
A lesson for insurers
According to the study, engagement that gives policyholders a voice while emphasizing its value is absolutely critical. To help insurers improve their consumer communication, LexisNexis recommends that insurers make customers aware of three things: 1) feedback is welcomed, 2) policies are crafted to best-fit the customer’s needs, and 3) the insurance company cares about its customers and will do whatever possible to make them happy.
“Carriers that master the cadence and messaging that consumers are looking for are the ones best positioned for long-term success,” notes Griffin. “So, insurers, acknowledge that your policyholders’ voices matter and understand their communications preferences so you can tailor your outreach to meet their expectations.”
The 2020 U.S. Auto Insurance Consumer Shopping Study surveyed 2,014 auto insurance customers who had researched or shopped for coverage within 12 months. To read the full report, click here.
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