November 16, 2020 by Udi Ziv, CEO of Earnix
According to a June 2020 McKinsey survey, 62% of respondents said they travel less now than they did before the onset of the COVID-19 pandemic. The same survey also found that car purchasing intent in the U.S. is 26% below pre-COVID-19 levels. It comes as no surprise that the current trajectory has had a significant impact on the car insurance industry.
A J.D. Power Insurance Intelligence report from June shows that with fewer drivers on the road, auto insurers have had to return $10 billion in rebates on premiums for policyholders. Given that consumer satisfaction is a key retention indicator for insurers, it is shocking that the same report found that consumers are, on average, 20% less satisfied with their insurer today, despite the rebates.
What does it take to improve consumer satisfaction and turn things around for the auto insurance industry during market downturns, especially those created by unforeseen global events?
COVID-19 has shifted consumer behavior, but most auto insurers have struggled to respond to those behaviors quickly enough. Moreover, providing consumers with the insurance bundle they need, at the time they need it and at a rate they can afford remains a long-lasting challenge for many insurers. For most, purchasing any insurance remains a negative experience, a testament to an increasing gap between consumers and insurers.
Insurers need personalized product offerings and competitive rates that are responsive to consumers’ financial needs and preferences. This can be achieved through an integrated real-time automated solution that uses proven analytical models, artificial intelligence, and machine learning, in a way that accelerates rate-execution. Automation can enable insurers to keep up with their customers’ expectations, earn their trust and retain their business.