As mobile apps begin to play a role in car insurance sales, research giant J.D. Power is moving to track the trend.
“We just introduced a question this year” about apps, said Jeremy Bowler, senior director of the global insurance practice at J.D. Power. Bowler heads up the company’s Insurance Shopping Study that since 2007 has tracked how consumers shop for new – and renew old – auto policies. Bowler said that it’s tricky for J.D. Power to release data points without gathering “meaningful” information and can’t report on trends with results from only one survey year but expects to see upticks in app usage in the years ahead.
“There are some pretty provocative things happening in the U.K.,” he said. Geico is experimenting with a system where a consumer can take a mobile device picture of his or her licenses and send it in. “The image will trigger a quote,” he said.
The shopping study trends show that the consumer is increasingly reliant on virtual processes. In the 2013, more than two-thirds of consumers reported getting at least one quote online and more than one in five new policy buyers complete the entire transaction over the Internet. For carriers and agents in this large and highly competitive space — more than $5 billion is spent annually on auto insurance advertising — every increment of market share counts.
The companies that are best set up to succeed are those that “embrace the new customer preferences,” said Bowler, and “perhaps, hand the car keys over to the consumer in terms of how the relationship gets managed.” Bowler suggests that carriers and producers ask consumers what their preferred method of communication is and follow up in those avenues.
“We started asking questions about emerging channels,” said Bowler pointing to click-to-chat, texting and social media as well as mobile apps. Carriers and agents routinely reach out to consumers at renewal time or at “life trigger” events (junctures such as graduations or weddings that might prompt a person to need certain kinds of insurance) but the more sophisticated companies “tailor the way they reach out to the customer” by using that person’s preferred method of communication.
Companies “can’t rely on what worked before,” said Bowler. The more nimble — and better poised for success — companies “embrace the new customer preferences … and foster loyalty with the customer of tomorrow and not the customer of today.”
Bowler said he urges companies to take note of how a customer communicates — did they click online, ping in on an app or call the 800 number — and also make sure to ask them what their preferred channels are. And don’t make demographic assumptions about who is using what path. “The interesting thing about (some new communication technology) is that it seems to leapfrog a generation. Sure, the Millennials are using it but — at least anecdotally — it’s how grandparents keep in touch with their grandchildren.”
And by implication, perhaps their insurance professionals.