Technology-Enabled Data Collection

• The use of technology-enabled data collection to inform policy premiums was identified as a key trend in both the US home and auto insurance industries based on the fact that a preponderance of industry experts (e.g., PolicyAdvice, PricewaterhouseCoopers, Automobile Experts HQ, The Zebra, CUInsight, WNS) are currently highlighting this trend as one that will "shape" home and auto insurance in 2020.
• Specifically, American insurers in both the home and auto markets are increasingly harnessing the power of data collection tools and associated personal information to tailor, validate and/or further stratify policy prices.
• In the US auto insurance industry, insurance companies are attaching sensors to cars as well as using mobile telematics to better assess consumer mileage and driving behavior.
• Similarly, Peer Insight and CUInsight report that US home insurers are leveraging wearables, smartphones, smart meters and drone data to capture more accurate information about property insurance risks and claims.
• Not only does the use of such individualized information benefit insurers by enabling them to more precisely model insurance risks and extend coverage to untapped markets, but the trend also appears to be driven by consumer demand for lower premiums.
• For example, PWC found that 69% of consumers would be willing to have a sensor attached to their car to lower auto insurance premiums.
• In parallel, a study by V12 found that 88% of consumers are demanding more personalized insurance products, including individualized pricing recommendations.
• Meanwhile, one example of technology-enabled data collection in the property and casualty insurance market is Utah-based startup Geomni, which uses drones to quickly and accurately collect property claims data for insurers.
• Additionally, Root Insurance offers an app that tracks drivers and can save them as much as 50% on average for car insurance rates.

AI Bots

• The use of AI-enabled bots was selected as another significant trend in the US home and auto insurance industries based on the extensive discussion of this trend by experts including PolicyAdvice, Duck Creek Technologies and WNS.
• Specifically, both auto and home insurance companies in the US are beginning to deploy virtual, AI-enabled bots to interact with customers online.
• For example, GEICO's Katie chatbot is recognized as a "great example" of AI-enabled chatbots, while Lemonade's claim bot Jim can assess and pay property claims in three seconds.
• Moreover, Duck Creek Technologies forecasts that 95% of customer interactions in the property and casualty insurance industry will be "powered by chatbots" by 2025.
• Additionally, auto insurance companies are beginning to deploy AI bots in the form of drones, which are used to automate vehicle inspection.
• Notably, Erie Insurance and Allstate are two leaders in the use of such AI technology to enhance the vehicle inspection processes.

• Overall, this trend is being driven by a number of factors, including the ability of AI to improve the customer experience, optimize costs and improve insurers' market competitiveness.

Omnichannel Sales

• Lastly, the transition to an omnichannel sales and communications approach was chosen as a current trend for both home and auto insurers in the US based on expert opinion (e.g., PolicyAdvice, CUInsight) as well as the widespread demonstration of this trend by home and auto insurance providers (e.g., Allstate, Progressive, Country Financial, Nationwide, Farmer's Insurance).
• Notably, Allstate, Progressive, Country Financial, Nationwide, Farmer's Insurance are among the myriad of home and auto insurers that are currently highlighted for their execution of effective customer outreach efforts through less traditional online channels such as social media.
• Specifically, insurers for these markets are increasingly enhancing their use of traditional direct-to-consumer marketing channels by adding online direct-to-consumer communications and sales vehicles.
• According to PolicyAdvice, the use of multiple distribution channels is becoming "more important" for auto and home insurance companies because it increases their access to new and existing customers.
• As such, this trend is being driven by the fact that it expands the market reach of key auto and home insurance industry players, while also "eliminating the hassle" many customers experience when obtaining such insurance.
• However, CUInsight notes that while 74% of insurance shoppers research online before they make a purchase, only 25% actually bought a home or auto insurance plan through online channels as of 2018.

Digital Tools

• A key trend that is expected to hit the home and auto insurance industry within the next few years is the proliferation of digital tools and technology.
• According to Computer Business Review, technology will automate forms and other documentation, which will reduce the number of human interventions required for transactions.
• Technology is also expected to impact data analysis for insurance companies so that they can "identify patterns and trends that can help drive better decision-making."
• As more Americans have adopted the smartphone, this will become the primary tool used to interact with insurance companies in the near future. Computer Business Review states that "smartphones will become the de facto standard for the purchase of policies and for claims management."
• This is not only a benefit for consumers, but also for insurance companies as they can use smartphone data like GPS and photographs to reduce insurance fraud.
• Voice technology will impact the home and auto insurance industry as well, which will allow for simpler interactions with insurance companies. For example, soon consumers likely be able to add and subtract items to their home insurance policies just by asking Alexa to do it for them.
• Other ways in which the insurance industry will use technology in the next few years include using tools like drones and weather data to predict vulnerabilities in a home so they can be corrected prior to damage occurring. This will help reduce claims and keep rates low for everyone.
• The use of technology and digital tools in the home and auto insurance industry is a trend expected to hit in the next 2-3 years because multiple industry publications are mentioning it and say it will impact the industry immediately and continue over the next decade or so.
• Several major insurance companies are already using smartphone apps to assist with the claims process, including Allstate, GEICO, Lemonade, and Farmers.

Behavior-Based Car Insurance

• One trend that is specifically going to impact the auto insurance industry is behavior-based car insurance. 
• Usage-based rates have been popular recently, but they "cannot account for distracted driving," so insurers are beginning to implement ways to detect a driver's behavior and use it to determine rates.
• For example, smartphone sensors can be used to detect or prevent mobile phone use during driving. Driver assistance features such as lane-keeping alerts and automatic braking can prevent accidents from happening at all.
• Wireless companies are working to implement smartphone features that automatically lock cell phones when a car reaches a specific speed.
• Insurance companies can extract this data from smartphones, wireless carriers, and vehicles to determine a driver's premium rate based on his or her driving behavior.
• As indicated in Forbes, "with real-world data from millions of devices, insurers can take better stock of risks, and drivers can track their own driving habits to reduce costs and improve safety for everyone out on the roads."
• Insurance Thought Leadership stated, "Smartphone telematics solutions allow insurers to easily receive customer data that provides insight on an individual’s driving habits and performance, providing the necessary information to more accurately stratify risk and deliver more personalized, regular consumer touchpoints and — in some cases — behavior-based rates."
• Behavior-based car insurance rates is a trend because multiple industry publications are mentioning that it will impact the auto insurance industry within the next few years.
• Additionally, 73% of drivers polled in survey indicated they "prefer insurance rates be based on their driving behaviors."
• Out of the top 10 U.S. auto insurance providers, at least nine are "testing forms of smartphone-based telematics programs."
• One smaller car insurance company that is at the forefront of behavior-based insurance is Root Insurance, which "offers customers a personalized auto insurance experience" that includes behavior-based rates.

Summary of Findings

• AAA's marketing messages include: "Safe to be Yourself", "Insurance that's not just insurance", "Helping You Save More", and "In the privacy of your car or home, you are free to be yourself whether you're trying out a virtual reality game, dressing up, doing yoga or dancing."
• Acknowledging that everyone is different, AAA tailors its "auto and home insurance to each member so they can do what they want no matter how different or specific."
• AAA has been using social media channels to promote its products. The social media platforms they use include Facebook, Twitter, YouTube, and Pinterest. The company also uses television as a marketing channel.
• AAA doesn't mainly use podcasts and influencers as part of its marketing strategy. There are only two recorded podcasts since 2015 that mentioned AAA.
• One podcast on Simply Explaining Insurance, which was released last March 5, 2015, talked about whether one should put towing on his auto policy or just use AAA insurance. The other podcast, released last February 21, 2020, entitled Florida Injury Claims by Jeff Andelman talked about "you need to have AAA or similar roadside assistance rather than assistance through your auto insurance."

Messaging

• GEICO has reinforced a closing slogan in their marketing message from one home and auto campaign to another throughout the years: "15 minutes could save you 15% or more on car insurance."
• The company employs a humorous marketing strategy, "making consumers remember their marketing initiatives and their tagline."
• Other marketing messages used for their auto and home products include: "Fast And Free Homeowners Insurance", "More Than Just Car Insurance", and "An Insurance Company For Your Car".

Marketing Channels

• GEICO promotes its auto and home insurance products via social media platforms like Instagram, Twitter, Forums, Facebook, YouTube, and Pinterest, where it engages consumers. Twitter is generating the most interest, at 82.9%, followed by Forums. GEICO is the top advertiser on YouTube, supplying 6% of its revenue in 2018.
•  Other channels used by the company include Blogs, Disqus, Newspapers, and Television. The company is the top advertiser on TV in the Insurance category, with 27.9% of ad spend in 2018.
• On these channels, GEICO uses a common slogan when advertising their auto and car insurance — "15 minutes could save you 15% or more."

Research Strategy