Survival of the Fastest–Strategy 1: Auto Quoting that Avoids the Hidden Costs of Lost Business

One-rate insurers can gain sizable and durable competitive advantages as the vanguard of a revolution in selling personal auto insurance.

(Image credit: Getty Images.)

In this, the first article of a four-part series, see how multiple auto rate calls damage the customer experience—and how insurers can evolve beyond obsolete quote flows.

Is your business suffering from a slow and outdated quoting process? How long does it take for your new customers to get a complete, accurate, fully bindable quote? How easy do you make it for them?

The insurance buying journey remains tedious and complex, requiring applicants to repeatedly input new information or validate data running in the background. Meanwhile, reports are ordered in sequential stages, contingent upon the outcomes of prior steps. This outdated process can result in up to a third of potential customers abandoning the sales funnel before even seeing a price. Of applicants that remain, as many as 30 percent may be uprated after the initial quote—a customer experience that erodes trust.

Whether purchasing directly through an online portal or contacting an agent or call center for a quote, today’s consumers expect insurance buying to be much faster and easier than this, akin to what they experience with other online retailers and financial services providers. To compete effectively, insurers need to raise their quoting game. How can insurers build more goodwill from that first critical encounter? It’s possible to avoid the bait-and-switch perception by rethinking the strategy that underpins the sales workflow.

Old Assumptions, Old Habits

The initial quote is often a teaser representing the most optimistic risk assumptions. The customer might be asked for further information as the process continues. The rate can quickly increase as the insurer orders actual underwriting data and important details start filling in—violations, accidents, coverage history, demographics, household details, and more.

Many insurers have historically staged their data ordering this way for a reason: Data has a cost, and existing workflows are set up to optimize spending relative to benefit. But in an interconnected world, this 20th-century approach to underwriting—ordering fewer reports to save money—may be missing the mark. This strategy can carry hidden and surprisingly high expenses. Dissatisfied applicants can harm an insurer’s brand in many ways, including poor word of mouth, which leads to missed opportunities for selling and cross-selling.

A Better Way

Insurers can leave behind the false economies of outdated quoting with a fresh approach that considers not only the cost of the data but the value it brings—the return on investment in more productive workflows and more accurate pricing. Brought forward by way of automation, critical underwriting data can support easier applications that keep more customers in the sales pipeline, where they can receive instant, once-and-done quotes that enable them to complete their purchases quickly. Avoiding a second rate call can foster trust and satisfaction that starts the customer relationship on a positive footing.

One-rate insurers can gain sizable and durable competitive advantages as the vanguard of a revolution in selling personal auto insurance. They can achieve this by:

  • Bringing decision points forward in the application and quoting workflow
  • Tailoring business rules to each transaction
  • Aligning quote throughput with risk appetite

These steps can help maximize policyholder satisfaction and loyalty while supporting more refined underwriting and rating—all of which can support profitability in today’s challenging personal auto market.

How long does it typically take your customers to get a bindable quote, and how can you upgrade the process to survive and thrive alongside your fastest competitors? Stay tuned for more evolutionary auto insurance quoting strategies in the next three articles of this series…

Click below for the other articles in the four-part series:

Survival of the Fastest–Strategy 2: Auto Quoting that Saves Customers and Insurers Time and Money

Survival of the Fastest–Strategy 3: Auto Quoting Built on a New Vendor Pricing Model

Survival of the Fastest–Strategy 4: Auto Quoting for Nimble Insurers—of Any Size

 

 

David Ayers //

David Ayers leads technology initiatives and insurance use-case development for Verisk’s LightSpeed platform, providing robust data and analytics, fraud detection, and driver, vehicle, and household risk identification to accelerate quoting and drive profitable growth. David is committed to being an industry champion who helps insurers overcome marketplace complacency by ushering in data-forward strategies and forward-thinking pricing that enable modern insurance buying experiences. He can be reached at david.ayers@verisk.com.

These opinions are the author’s own.

Leave a Comment

(required)