How Is Inflation Impacting Your Auto Insurance Members?
Earlier this month, Drips’ Vertical Market Director, Matt Aster, attended the Digital Insurance Summit, where he participated in the “Every Day in A Different Way: Sharpening Your Omni Marketing” panel. His presentation was so inspiring that we wanted to jump in with a wrap-up that gave people who couldn’t make it a big picture view. Here’s what we learned!
Before we get into omni marketing, though, we want to properly explain why this is not just a “theoretically nice to have” concept, but an essential approach — and the “why” in this case is inflation. As inflation seeps into more areas of our lives, people’s shopping habits react accordingly. But some industries are seeing surprising shopping behaviors, even on necessary or required offerings. Unfortunately, auto insurance is one of them.
What Makes Members Shop?
In 2022, auto insurance costs are expected to increase by as much as 12% (Business Insider), and with people returning to the road post-pandemic, some “pay what you drive” policy plans are starting to cost the same as traditional plans. But we can’t just blame the fed for this change… the increase is actually on consumers. As drivers drive more (an increase of 32% in March-May 2021 compared to the same months in 2020), there’s also been a significant 26% increase in auto-related fatalities in 2021 compared to 2019 (CNBC).
Another reason people tend to shop around comes from a terrible claims experience. And if you’re reading this thinking, “oh, surely not with our company,” you might want to take another look because a whopping 68% of auto insurance complaints are centered around the claims process (Value Penguin). It’s not just people unhappy with their outcome either — the complaints also include long hold times and a lack of communication. While insurance companies can’t do anything to stop their drivers from reckless driving, they can give their members fewer reasons to jump ship by addressing some of these other issues.
The Cost of Losing Policyholders
But before we get to the solution, let’s talk about the cost of losing policyholders. Yes, losing a member means losing the policy, but there’s another cost when you consider more people than ever will be shopping around this year — insurance agents. The cost of agents trying to win their customers back is already substantial, but if many of their members are leaving, it’s not that difficult to imagine that they’d want to go as well.
What’s the Solution?
Now that we’ve adequately painted the picture for you, here’s why an omni marketing solution is best — everyone who can drive needs insurance. We know! Such a groundbreaking comment. But the impact of this statement is thus: other industries can easily segment their customers because they know who their audience is and what they like. There is a wide variety of auto insurance policyholders which makes it challenging to talk to people the way they prefer. That’s why omni marketing that includes a conversational outreach strategy is the solution. This varied approach reaches people on multiple fronts so that you don’t have to put all your metaphorical eggs into one basket.
So, now that you know the problem and the solution let’s talk about how best to solve it.
Please Note: This guest post was contributed by Drips, and originally published on their website.