Customer Journey: Car Insurance

Part
01
of one
Part
01

Customer Journey of Car Insurance Buyers

Car insurance buyers in the UK make their purchases online (56%), in-person (7%), via phone call (33%), and mail (3%).

STEPS TAKEN BY CUSTOMERS IN THE UK WHEN PURCHASING CAR INSURANCE

  • When purchasing car insurance in the UK, customers begin by first researching the insurance providers. About 65% of the survey participants did so online, through insurance agents (9%), in-person conversations (20%), and television (12%).
  • About 63% of them discover car insurance brands online using a computer, tablet, or smartphone, with many of them using the research online, purchase offline approach (ROPO). Another 10% make use of insurance agents, 16% from in-person conversations, and 21% from television.
  • For younger generations such as millennials, social media platforms play a vital role in their discovery of car insurance brands. About 33% of them are more interested in brands/products that were advertised on social media.
  • "Many customer journeys involve leaving multiple browser windows open as consumers compare offers across sites."
  • According to a 2014 research study by Growth from Knowledge (GfK), 69% of customers renew their car insurance policies, 22% purchase car insurance from a new provider online, and 9% use an offline provider.
  • Customers research online across price comparison sites, insurance providers, and search engines. A 2018 survey by Accenture, however, showed that 67% of customers spent less than four hours researching

HOW THEY EVALUATE THEIR OPTIONS

  • Online channels are essential to customers when evaluating their car insurance options.
  • Millennials (54%) see consumer reviews as the most trustworthy source of information when purchasing car insurance, while 35% of Generation X believe the same.
  • "Consumers who agree they enjoy taking chances when buying new products are more likely to buy insurance online, perhaps taking a risk with an unknown brand they discovered during research. On the other hand, those who agree they would rather stick with a familiar brand are more likely to make offline purchases, perhaps reassured by talking directly to a provider or going through a broker."
  • The price and brand reputation are important to customers when selecting their car insurance brand. About 49% of them are willing to spend more for a reputable brand. However, the price is the primary driver for some customers when evaluating car insurance brands.
  • About 78% of customers chose to 'get a good deal' as their most significant motivator when selecting a car insurance brand, followed by the "level of cover (67%), ease of purchase (24%) and brand awareness (22%). However, older car owners chose the personal touch (21%) as a motivating factor."
  • Car insurance buyers in the UK (77%) said the quality of service is vital when selecting an insurance provider, while 75% of them selected ease and convenience as an essential factor.

PURCHASE PROCESS

  • Most customers in the UK purchase car insurance annually and hardly engage with the insurance providers except for when they want to make a claim.
  • Most car insurance purchases take place online, especially among millennials. According to a 2018 research study conducted by Accenture, 56% of customers purchase car insurance online, and 19% of millennials make such purchases on a mobile device.
  • About 69% of car insurance customers renew their insurance with existing providers. This purchase process involves receiving a policy renewal letter. If this letter carries a premium increase, there is a higher likelihood that customers will try to look for better options. However, 11% of the customers would choose to remain with their car provider regardless of an increase in premiums.

PURCHASE CHANNELS

  • The purchase channels used by UK customers when purchasing car insurance include online (56%), in-person (7%), phone call (33%), and mail (3%).

DRIVERS

  • Car insurance buyers in the UK make purchases due to a "risk-averse mindset seeking peace of mind from insurance/add-ons, high spec vehicle, high reliance on vehicle for work and/ or family commitments, and perception of value of insurance/add-ons positively impacted by the previous experience of a motor vehicle accident (MVA)."

BARRIERS

  • Some barriers/deterrents to purchasing car insurance in the UK include the cost, as well as an "it won’t happen to me mindset envisaging the unlikely need to claim insurance/add-ons, general skepticism towards the cost of insurance/add-ons and the value of these, perception of value of insurance/add-ons negatively impacted by previous experience of MVA, and low self-efficacy and reliance on family or brokers to inform insurance decisions."

RESEARCH STRATEGY

We utilized some articles from GfK that were beyond Wonder's standard two-year timeframe to provide relevant information regarding the customer journey of car insurance buyers. We used these reports to provide some added insights to the recent information which we obtained from Accenture's 2018 study, as the available information within the standard timeframe was not sufficient to address every criterion for this request. Since the criteria stated that our findings be tailored to focus on the UK alone, we only found periodical studies that provided the customer journey of car insurance buyers in that region. As such, we have included some reports for a 2014 study conducted for car insurance buyers in the UK as well as one study by the Competition and Markets Authority (CMA) GMK.
Sources
Sources