Auto Insurance Buyers

Goals

To provide information about the different segments of insurance buyers in the public domain. This will help build a new market strategy for the auto insurance industry.

Early Findings

Auto Insurance: Consumer Segments

  • According to auto insurance research conducted by McKinsey, there are nine high-level auto insurance buyer segments. The segmentation of the buyers is based on customer needs and behavior.
  • The nine segments include;
    • Independent advice-seekers: This category of buyers prefer the advice of a local agent representing multiple carriers, and they tend to follow the advice of agents. They are not price-sensitive.
    • Undisolveds: The uninvolved category is primarily defined by their lack of preference and shows no concerns towards auto insurance. They do not desire advice, convenience, or brand.
    • Low-price experts: The low-price experts make decisions based on the ability to get the lowest price, and they are willing to reduce coverage and compromise on brand and convenience.
    • Active shoppers: The active shoppers promptly research their options, desire information, and advice, and tend to shop frequently. They are said to be 50%+ conscious about price and make tradeoffs between insurance coverages.
    • Self servicers: They put convenience first and expect multichannel access. They also do not value having an agent, and their propensity to shop and price sensitivity is above-average.
    • Price-conscious advice hunters: This category of buyers is less loyal, wants personalized advice, has a 31% shopping tendency, and is low-cost-biased towards stronger brands.
    • High-touch protection seekers: This category of consumers is in search of extra protection and tailored coverage options. They also desire a strong brand, want multichannel convenience, and are willing to pay for expectations.
    • Affinity-oriented brand buyers: This type of consumer wants a strong, well-known, and established brands and are not interested in any intimacy with a local agent. They also do not desire to research options or actively shop/switch.
    • Branded agent loyalists: This category wants both a local agent and a strong brand and is biased about the exclusive agent channel. They are known to be loyalists, with 70% of them staying more than ten years giving then the lowest reported shopping and switching rates.

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