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Full Coverage: Consumer Engagement Opportunities for Insurance Firms
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Full Coverage: Consumer Engagement Opportunities for Insurance Firms

Bad news is everywhere these days, but most consumers don’t imagine themselves in the situations they see on the news or read about in the papers. Everyday life does include plenty of risk, however, and in many ways, U.S. consumers could be better briefed about how to protect themselves against the unthinkable.

That’s where insurers come into play. Yet despite all of the risk that surrounds us each day, findings from the recent Consumer Insurance Sentiments report indicate that most Americans are relatively passive when it comes to their home and auto policies. It’s not so much that they don’t care about these critical documents that protect their most valued possessions. Rather, the findings show that they care when they take out the policies, but then tend to lock them up and forget about them.

In looking at how long consumers maintain continuous coverage, 27.5 percent say they’ve had the same auto policy for 15 years or more, slightly more than the 26.2 percent that say they’ve had the same home policy for 15 years or more. The people who do opt to switch, however, don’t do so very often. In looking at the percentages of consumers that have changed auto and home policies over the past three years, more than 80 percent only switched one time, indicating that the buy-and-hold mentality is even strong among people who do make occasional changes.

The implications from these findings are clear. If insurers want to engage with consumers and seek their business, they need to do a better job of differentiating themselves and their policies. The recent Nielsen Insurance Track survey suggests that insurers have a significant opportunity to better educate consumers about the benefits of re-examining their life stages and the coverage options for them. It’s also likely that successful insurers will be the ones who create more tangible relationships with their customers.

Creating Relationships and Times to Switch

As with any meaningful relationship, trust, comfort and availability are important aspects of the connection between an insurer and customer. But compared with traditional, tangible goods, insurance is somewhat of an anomaly when it comes to the consumer’s purchasing experience.

Unlike a car or box of cereal, insurance isn’t something that a consumer can experience through touch or sight. In the insurance world, consumers are primarily limited to comparing a series of “if/then” statements printed on paper. Furthermore, since consumers can’t interact with their policies, they typically don’t show them off or brag about their coverage limits with their friends or family members. So in this way, and given consumers’ buy and hold tendencies, success requires a conscious effort to create meaningful relationships that transcend the infrequent times when formal documents are involved.

Consumers don’t tailor how they perceive different types of insurance. In fact, findings from the recent Nielsen study show that consumers generally have similar sentiments about their auto and residential insurance, regardless of whether they’re a long-term policyholder or a switcher. In general, consumers tend to view insurance as a commodity. That said, however, policies are not identical to one another, which presents a notable opportunity for companies looking to highlight policy and coverage trends, benefits and differences.

For more detail and insight, download Nielsen’s 2014 Consumer Insurance Sentiments report.

Methodology

Nielsen Insurance Track is a survey conducted biennially, collecting consumer-level data on behaviors related to auto, residential, life, and other insurance coverage types. Approximately 35,000 respondents, sampled to be nationally representative, participate.