The fragmented auto insurance customer experience is set for disruption, according to a new report by Deloitte.
The report, “Reinventing the insurance customer experience for loyalty,” high
lights how collaboration among original equipment manufacturers (OEMs), insu
rers and captives can drive the future of auto insurance while attracting and retaining customers.
OEMs and auto insurers share a similar woe. Customer loyalty for OEMs reached an
eight-year low in 2023, while insurers face churn in the wake of rising auto premiums and changing needs.
Citing a 2024 J.D. Power Shopping Study, Deloitte reported that 49 percent of
auto insurance consumers actively shopped for a new policy in the past year, likely fue
led by auto insurance premium increases that averaged 26 percent between 2023 to 2024.
Declining claims experience is another factor adding to the rise in auto insurance shopping.
Providing a seamless insurance journey for customers requires OEMs and their captives to create a mutually beneficial relationship wit
h insurers and customers to build loyalty, boost profitability and define the future to secure a competitive advantage, the report stated.
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With electric and automated vehicles set to take over roads soon, there is no better time to disrupt the current process for obtaining auto insurance.
Related article: Going, Going, Gone: ‘Disruption’ to Shrink Traditional Premiums for Auto
The potential onset of autonomous driving regulation could shift liability away from the driver to OEMs, captives and system partners (e.g., software companies).
“To prepare, companies should understand these emerging developments and risks and act on the associated insurance nee
ds. Joining the mobility-insurance value chain now could give OEMs, captives, and carriers a chance to dictate how change happens and secure market share and competitive advantage,” the report’s authors stated.
Other factors disrupting the customer experience include new competitors, data ethics and consumer trust.
Customers want a seamless experience and a one-stop shop to address their needs and save time. Deloitte found that “1 in 3 U.S. consumers are interested in purchasing ’embedded’ insurance directly from the manufacturer, citing cost, convenience, and streamlined purchasing as primary benefits, with even greater interest globally.”
