Driving value and generating revenue for online brokers in motor insurance

Between 2010 and 2020, it is estimated that 8 out of 10 Britons saved money by switching at least one financial services product. According to the annual GoCompare Switching Report car insurance was the most switched product, in 2019/20 alone 28% switched, compared to 19% in 2015.

Recent regulatory changes in the UK that have affected the insurance market – like the Financial Conduct Authority’s (FCA) ban on pricewalking – certainly haven’t left the motor insurance industry out.

However, there are opportunities out there for brokers to find “a point of differentiation within the market” through becoming recognised for the best customer service, demonstrating time efficiency and consolidating belief of value for money.

Customers are less likely to shop around if they are confident that you can save them time, and make their lives less stressful through handling their needs seamlessly.

Ecclesiastical commissioned the research company, FWD, to hear the views of brokers across the UK about their contact with customers in 2019, and the results may shock you:

In 2018, a huge 41% of brokers used email marketing for the first time. “Email marketing began roughly in 1978”, a staggering 40 years prior to this statistic, yet many insurance brokers haven’t been embracing this lucrative marketing technique until recently… which is slightly worrying…

Build relationships

32% of brokers do not have enough time or people to dedicate to relationship building

Building relationships with clients/ customers is important, but maintaining what has been built is equally – if not more so. By understanding how customers use a product or service from a brand, and observing additional unmet needs, brands are able to create new features and offerings to meet those vital needs.

Question: How can I build relationships with existing customers?

Answer:

Competition is rife, as tech-centric start-ups are simply better at meeting and adapting to the needs and expectations of today’s consumers. Follow these three recommendations to ensure your company can drive value and increase revenue – from start-up to legacy brokers.

1. Look for new ways to add value

An often overlooked way to keep customers informed and happy is by talking to them, or pre-empting that they may be busy individuals who won’t always have time for fussy admin. Streamlining the customer experience through frictionless service features like automated payment options, digital features (such as policies and procedures) and apps that keep all of a customer’s information regarding their policy/policies.

2. Be fast, be flexible

An accident can cause a lot of distress to all involved, claims that are handled quickly and with minimal hassle give your customer the peace of mind that you are the best, especially when they are supported, reassured and their needs are preempted. Considering a flexible approach that delivers quickly goes a long way to retain someone as a loyal and long-term customer.

In addition to retaining this customer, it could bring in new business through word-of-mouth referrals.

3. Cover all the bases

By outsourcing the claims management process to the proper end-to-end accident management company, you get access to the right people. This can help you retain customers as you make their experience more efficient and effortless.

You could consider services like:
⚙️ Vehicle recovery and collection
⚙️ Courtesy vehicles
⚙️ Engineering

As well as any additional (and necessary) services.

Question: How can I build relationships with new customers?

Answer:

New client acquisition is:

more important than ever for insurance agencies to help keep their revenue up, with recent reports that around one in three agents have experienced current clients asking to decrease coverage in order to save money.

Of course, you could compete on price… but trust is one of the biggest differentiating factors between insurance companies. Connected customers are not only more loyal, but also less price-sensitive. If your customers trust you and feel connected, they’re more likely to stick.

A frustrated customer can be hard to ‘calm down’, especially if they’ve been experiencing a lot of channel switching. By optimising your website’s FAQ or “Help” section, you ensure a less disgruntled customer if they find a simple solution to their problem. If their problem is more complicated, listen to them. Rather than focusing on call-time management, you can mitigate any disloyalty with effort on your part… not on the customer’s.

Our report “Stand & Deliver: Success in Search for Online Insurers”, investigates different insurers, including those in the motor insurance industry. It looks towards the content offered from different brokers including RAC, Admiral and the AA.

The future of insurance personalisation

It is projected that by 2023, 1 in 5 of US motor policies will be usage based. At the moment, these policies are based on miles driven, or driver behaviours (like speeding) – in other words, a black box.

However, the future of motor insurance is based on personalisation in different ways. While telematic systems can tell if a driver has slammed on their brakes, connected systems can understand why. Which will change the insurance landscape forever.

The market for IoT-based insurance innovations looks robust. These connected systems will produce a symbiotic relationship between driver and vehicle, if they understand why a driver is braking suddenly – maybe a careless pedestrian has walked onto the road, or the driver is simply acting erratic – being able to personalise the policies to this level will enable drivers to trust more in the service they’re receiving… which is great from a marketing perspective.

Insurers with digital business models are leading the charge at a time when customers are increasingly searching for sophisticated, on-demand tools.

With many of these insurers close to a breakthrough with a “personalised insurance engine”; a fully automated customer journey – leading each individual customer through a convenient and data-driven experience that feels tailored to their individual needs similar to interacting in person.

80% of insurance products are still sold offline, according to the German Insurance Association. However, the Covid-19 pandemic has accelerated the shift to the digitalisation of insurers. Customers expect immediacy which means traditional insurers will have to adapt to keep up with digital natives; a lot of progress has to be made.