While the thought of changing policies can be daunting, carriers are throwing hundreds of millions (if not billions) into advertising budgets to make the consumer aware of ways to save by switching. As a result, the industry is experiencing a decline in brand loyalty in favor of pricing. A brand may bring a customer in the door, but pricing seals the deal.
Become a Financial Services Experience Maker
Perficient has the industry experience and capabilities to transform and power financial services firms with modern technology and digital solutions. Explore how we can help you become an experience maker in financial services.
Watch the Video
The pandemic accelerated this trend. A JD Power survey found that 54% of auto insurance customers took some policy action to control the cost of their policy, including 17% who reduced coverage and 12% increased deductibles. These are prime opportunities for the carrier to offer personalized experiences and products that fit the risk needs and pricing affordability policyholders require. The balance of the actions – approximately 15% – were policyholders shopping different carriers…yet another opportunity for companies to differentiate themselves to the shoppers where only 2% of new entry occurs annually.
We’ve all heard it’s cheaper to keep a customer than to secure a new one. In the personal lines market, satisfied customers are 80% more likely to retain with a carrier, a metric that supports higher lifetime values and reduced customer churn expense. The shopping risk and impact on profitability are further heightened when we consider that only 29% of P&C customers are truly satisfied with their current provider, and 88% demand more personalized experiences.
In short, a brand attracts shoppers, but pricing closes the deal. Digital efficiencies will create operational efficiency and customer experiences to improve product pricing and tailored experiences that foster authentic, genuine, and profitable relationships between carriers and policyholders.