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The Insurance Purchase Decision - US - November 2015

The Insurance Purchase Decision - US - November 2015

"The insurance purchase decision has significant long-term impact on consumers’ wallets and insurers’ success. Most consumers are loyal to the insurer they pick and do not switch often, indicating that insurers need to achieve new opportunities where they can be found. Marketers who understand the factors that influence consumer attitudes about buying insurance can better ensure future success."

- Monica Staco, Category Manager - Financial Services

This report discusses the following key topics:

Insurance consumers are satisfied and loyal, making switching challenging
Customer service trumps savings
More consumers going online


OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY
The issues
Figure 1: Insurance satisfaction, by type, August 2015
Figure 2: Insurance satisfaction, claims and premiums, August 2015
Figure 3: Nontraditional insurance purchasing attitudes, August 2015
The opportunities
Figure 4: Insurance purchasing behaviors – Life insurance, by age, August 2015
Figure 5: Insurance satisfaction, loyalty, August 2015
What it means
THE MARKET
What you need to know
Demand for insurance products strong
Market forces signal continued need for insurance
Interest rate environment key for life insurers
Market breakdown
Life insurance premiums rebound, led by stock-market linked products
Figure 6: US life insurance premiums, 2009-14
Number buying health insurance increasing
Figure 7: Percent of Americans without health insurance for the entire year, 2003-13
Auto and homeowners/renter insurance premiums continue to grow
Figure 8: US property and casualty premiums, 2009-14
Market factors
Many more insurance needs as unemployment nearing 5%
Figure 9: US unemployment, September 2009-15
Number of first-time home buyers increases
Figure 10: Existing home sales, in millions of units, August 2014-15
Auto sales on track for best year since 2000
Figure 11: Total US sales and fan chart forecast of market, at current prices, 2010-20
Looming interest rate decision has impact on life insurance
KEY PLAYERS
What you need to know
Online growth builds demand for consumer-focused user experience
Usage-based insurance threatened by privacy concerns
Amazon, Google, Walmart create alternative insurance channel
What’s working?
Focusing on consumer, sites improve user experience
Figure 12: Oscar Health Insurance digital ad, 2015
What’s struggling?
Privacy concerns keep usage-based insurance from gaining traction
Current technology offerings not enough for young consumers
Figure 13: Reasons to shop around – Life insurance, by age, August 2015
Young consumers open door to usage-based insurance opportunity
Figure 14: Insurance satisfaction, by age, August 2015
What’s next?
Private exchanges rise following ACA
Figure 15: Public versus private exchange annual enrolment forecast, 2014-18
Selling health insurance in retail stores
Amazon, Google, Walmart threaten to enter insurance market
Figure 16: Nontraditional insurance purchasing attitudes, by race/Hispanic origin, August 2015
THE CONSUMER
What you need to know
Policyholders are very satisfied with their insurer
Customer service drives satisfaction
Young consumers represent best market for new opportunity
Savings opportunities via innovation is key to new markets
More insurance purchasing being done online
Men and Hispanics shopping via mobile devices
Alternate insurance channels can also target men and Hispanics
Insurance coverage
Some form of insurance owned by most consumers
Insurance coverage increases with age
Figure 17: Type of insurance coverage – All, by age, August 2015
High-income earners are opportunity for life insurance
Figure 18: Type of insurance coverage – All, by household income, August 2015
Hispanics under index on insurance ownership
Figure 19: Type of insurance coverage – All, by race/Hispanic origin, August 2015
Method of purchase
Insurance purchase experience can depend on type of insurance
Figure 20: Nontraditional insurance purchasing attitudes, August 2015
Customer service can impact purchasing method
Method of purchase – Life insurance
Most buy life insurance from employer or agent
Figure 21: Insurance purchase method – Life insurance, August 2015
Insurers can reach young men via financial advisors
Figure 22: Insurance purchase method – Life insurance, by gender and age, August 2015
Direct mail still effective for Black audience
Figure 23: Insurance purchase method – Life insurance, by race/Hispanic origin, August 2015
Method of purchase – Health insurance
Nearly half receive health insurance via employer
Figure 24: Insurance purchase method – Health insurance, August 2015
Blacks and Hispanics seek health insurance outside employer
Figure 25: Insurance purchase method – Health insurance, by race/Hispanic origin, August 2015
Method of purchase – Auto insurance
Online purchasing gaining traction from agents
Figure 26: Insurance purchase method – Auto insurance, August 2015
25-34-year-olds buying auto insurance online
Figure 27: Insurance purchase method – Auto insurance, by age, August 2015
Blacks and Hispanics seek personal touch of agent
Figure 28: Insurance purchase method – Auto insurance, by race/Hispanic origin, August 2015
Method of purchase – Homeowners/renters insurance
Most buy homeowners insurance through agent
Figure 29: Insurance purchase method – Homeowners/renters insurance, August 2015
Attitude toward method of purchase
Nontraditional insurers entering market
Figure 30: Nontraditional insurance purchasing attitudes, August 2015
Alternate insurance channels can target men
Figure 31: Nontraditional insurance purchasing attitudes, by gender, August 2015
Across all income groups, price still matters
Figure 32: Nontraditional insurance purchasing attitudes, by household income, August 2015
Hispanics twice as likely to consider mass merchandiser for insurance
Figure 33: Nontraditional insurance purchasing attitudes, by race/Hispanic origin, August 2015
Costs and options most important to young buyers online
Figure 34: Insurance purchasing attitudes, by age, August 2015
Insurance behaviors
Customer service is universally important
Figure 35: Insurance purchasing behaviors – All, August 2015
Insurance behaviors – Life insurance
Technology important to next generation of life insurance customers
Figure 36: Insurance purchasing behaviors – Life insurance, by age, August 2015
Parents can be won with discounts
Figure 37: Insurance purchasing behaviors – Life insurance, by presence of children, August 2015
Insurance behaviors – Health insurance
Few consumers filing claims online
Figure 38: Insurance purchasing behaviors – Health insurance, all, August 2015
Young consumers may switch for savings without sacrificing service
Figure 39: Insurance purchasing behaviors – Health, by age, August 2015
Saving parents money and time can be effective
Figure 40: Insurance purchasing behaviors – Health insurance, by presence of children in the household, August 2015
Hispanics more likely to switch for discount
Figure 41: Insurance purchasing behaviors – Health insurance, by race/Hispanic origin, August 2015
Insurance behaviors – Auto insurance
Consumers looking for discounts in auto insurance
Figure 42: Insurance purchasing behaviors – Auto insurance, all, August 2015
Figure 43:Progressive Insurance mail ad, 2015
Figure 44: Allstate Insurance email ad, 2015
One in five Millennials buy auto insurance online
Figure 45: Insurance purchasing behaviors– Auto insurance, by generation, August 2015
Insurers can save parents time with online purchasing
Figure 46: Insurance purchasing behaviors – Auto insurance, by presence of children, August 2015
Hispanics more likely to interact with auto insurer online
Figure 47: Insurance purchasing behaviors – Auto insurance, by race/Hispanic origin, August 2015
Insurance behaviors – Homeowners/renters insurance
Half of women value customer service
Figure 48: Insurance purchasing behaviors – Homeowners/renters insurance, by gender, August 2015
Figure 49: Insurance purchasing behaviors – Homeowners/renters insurance, by generation, August 2015
Reasons to shop for new insurance policy
Reasons for a new life insurance
Figure 50: Reasons to shop around – Life insurance, all, August 2015
Figure 51: Reasons to shop around – Life insurance, by age, August 2015
Reasons to shop for new
insurance – Health insurance
Premiums on minds of all
Figure 52: Reasons to shop around – Health insurance, by household income, August 2015
New technology and discounts can attract young consumers
Figure 53: Reasons to shop around – Health, by age, August 2015
Hispanics having children present opportunity
Figure 54: Reasons to shop around – Health, by race/Hispanic origin, August 2015
Reasons to shop for new
insurance – Auto insurance
Customer service is a challenge for auto insurers
Figure 55: Reasons to shop around – Auto, all, August 2015
Gen Xers most influenced by customer service
Figure 56: Reasons to shop around – Auto, by generation, August 2015
Hispanics less concerned about customer service
Figure 57: Reasons to shop around – Auto, by generation, August 2015
Homeowners insurance
Similar to auto insurance
Figure 58: Reasons to shop around – Homeowners/renters, all, August 2015
Higher income earners more influenced by poor customer service
Figure 59: Reasons to shop around – Homeowners/renters, by household income, August 2015
Insurance purchase attitudes
Access to research and discounts makes agents valuable
Figure 60: Insurance purchasing attitudes, by method of purchase, August 2015
Agents provide personal touch
Figure 61: Insurance purchasing attitudes, August 2015
Affluent like efficiency of agents
Figure 62: Insurance purchasing attitudes, by household income, August 2015
Men shopping via mobile devices
Figure 63: Insurance purchasing attitudes, by gender, August 2015
Hispanics shopping via mobile devices are open to digital ads
Figure 64: Insurance purchasing attitudes, by race/Hispanic origin, August 2015
Opportunity to reach young dads via mobile
Figure 65: Insurance purchase attitudes – CHAID – Tree output, August 2015
Figure 66: Insurance purchase attitudes – CHAID – Table output, August 2015
Insurance satisfaction
Policyholders very satisfied overall
Figure 67: Insurance satisfaction, by type, August 2015
Customer service can trump savings
Figure 68: Insurance satisfaction, claims and premiums, August 2015
Majority of consumers want to be loyal to one brand
Figure 69: Insurance satisfaction, loyalty, August 2015
APPENDIX
Data sources and abbreviations
Data sources
Abbreviations and terms
CHAID analysis
Methodology
Consumer table
Figure 70: Insurance satisfaction, by type, August 2015
RESEARCH METHODOLOGY
US Research Methodology
Consumer research
Social Media Research
Trade research
Statistical Forecasting

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