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Innovations in the Insurance Market - US - April 2016

After years of offering little innovation, the insurance industry is rapidly integrating technology into its interactions with consumers. Mobile apps that make it easier to get information and conduct transactions, trackers that provide feedback so people can change their behavior, and devices that keep homes safer and more environmentally friendly are customer-centric innovations that are changing consumer expectations of both the industry in general and their individual carriers. Because almost everyone needs some kind of insurance at some point in the lives, companies have to continue investing in innovations to meet customers’ expectations or risk losing their business to companies that do.

This report focuses on the recent innovations in the insurance industry as well as the innovations consumers would be most interested in seeing. While some innovation has been in the area of product development, most have revolved – and will continue to revolve – around mobile functionality, whether as an add-on to web functionality or as a standalone operation. Additional innovations are coming in the areas of data analysis, customer service, and distribution. Companies that excel in these areas, even if they are not traditional insurance companies, stand the best chance for succeeding in this rapidly changing industry.

The insurance industry is not known for innovation, but competitive forces are driving insurers to develop more new products and features than ever. To find success, insurers will have to offer innovations that improve the customer experience through greater efficiencies, lower prices, or better and faster service, rather than merely through additional product offerings.

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Innovation can be more important than cost
            • Figure 1: Interest in insurance innovation, by demographics, January 2016
          • Consumers are still not downloading insurance mobile apps
            • Figure 2: Consumers who have downloaded insurance mobile apps, by type of insurance owned, January 2016
          • Experience is still key
            • Figure 3: Attitude toward innovation, by generation, January 2016
          • The opportunities
            • Is there an opening for non-insurance companies?
              • Figure 4: Interest in purchasing insurance from a non-insurance company, by gender and age, January 2016
            • Tools that help consumers make transactions are of most interest
              • Figure 5: Interest in text alerts and mobile apps, January 2016
            • Incentives can drive usage of health and fitness trackers
              • Figure 6: Interest in trackers with incentives, January 2015
            • What it means
            • The Market – What You Need to Know

              • Life/Health is growing faster than P&C
              • Market Size and Forecast

                • Historic sales performance
                  • Figure 7: Net written premiums for property and casualty, life, and health insurance, at current prices, 2010-20
              • Market Factors

                • Big data is changing how insurance works
                • Key Players – What You Need to Know

                  • Prudential is offering life insurance to HIV patients
                    • John Hancock Vitality Program
                      • Mobile apps go beyond transactions
                        • Mobile apps are still struggling for usage
                          • Insurance companies interest in drones is growing
                            • Mobile-first will grow
                            • What’s Working?

                              • Prudential is offering life insurance to HIV patients
                                • John Hancock Vitality Program
                                  • Figure 8: John Hancock Vitality Online ad, 2015
                                • Mobile apps go beyond transactions
                                • What’s Struggling?

                                  • Mobile apps are still struggling for usage
                                    • Figure 9: Consumers who have downloaded insurance mobile apps, by type of insurance owned, January 2016
                                • What’s Next?

                                  • The use of drones by insurance companies will increase
                                    • The mobile-first strategy will grow
                                      • Knip
                                        • MetroMile
                                          • Insurify
                                            • Snapsheet
                                            • The Consumer – What You Need to Know

                                              • Most consumers have auto and health insurance
                                                • Mobile apps are underutilized
                                                  • More interest in home security and health tracking devices than in safe driving devices
                                                    • Innovative solutions appeal to Hispanics
                                                      • Mobile apps or text alerts?
                                                        • Most popular mobile apps are transactional
                                                          • Millennials are most likely to trust insurance companies
                                                            • Agents are preferred to websites for information
                                                            • Insurance Ownership

                                                              • Most consumers have auto and health insurance
                                                                • Figure 10: Insurance ownership, January 2016
                                                              • Single segment is underinsured
                                                                • Figure 11: Insurance ownership, by marital status, January 2016
                                                            • The Appeal of Mobile Apps

                                                              • Mobile apps are crucial to some
                                                                • Figure 12: Importance of mobile offerings, by demographics, January 2016
                                                              • Yet they have yet to catch on
                                                                • Figure 13: Have downloaded mobile apps, by type of insurance owned, January 2016
                                                            • Interest in Technological Devices

                                                              • More interest in home security and health tracking devices
                                                                • Figure 14: Technological devices for driving, home, and health tracking, January 2016
                                                              • Interest in all devices is highest among iGen
                                                                • Driving
                                                                  • Figure 15: Interest in safe driving devices, by generation, January 2016
                                                                • Home security
                                                                  • Figure 16: Interest in home security devices, by generation, January 2016
                                                                • Health monitoring
                                                                  • Figure 17: Interest in health tracking devices, by generation, January 2016
                                                                • Hispanics more interested in devices that track driving
                                                                  • Figure 18: Interest in devices that track driving, by Hispanic origin, January 2016
                                                                • Parents are interested in tracking driving habits as well
                                                                  • Figure 19: Interest in devices that track driving, by parental status, January 2016
                                                                  • Figure 20: Progressive Snapshot print ad, 2015
                                                              • Interest in Innovations

                                                                • Men are more interested in innovations
                                                                  • Figure 21: Interest in innovations, by gender, January 2016
                                                                • Innovative solutions appeal to Hispanics
                                                                  • Figure 22: Interest in innovations, by Hispanic origin, January 2016
                                                                • Fitness and diet trackers appeal mostly to female Millennials
                                                                  • Figure 23: Interest in fitness/diet trackers, by gender and age, January 2016
                                                              • Interest in Technology Offerings

                                                                • Mobile apps or text alerts?
                                                                  • Figure 24: Interest in mobile apps and text alerts, January 2016
                                                                • TURF Analysis
                                                                  • Figure 25: Interest in technology offerings, TURF Analysis, January 2016
                                                                  • Figure 26: Table - TURF Analysis – Interest in technology offerings, January 2016
                                                                • Methodology
                                                                  • Most popular mobile apps are transactional
                                                                    • Figure 27: Desired mobile apps, January 2016
                                                                  • Young people want to use mobile apps to get information
                                                                    • Figure 28: Interest in mobile apps, by generation, January 2016
                                                                • Attitudes toward Insurance

                                                                  • Women still don’t trust insurance companies
                                                                    • Figure 29: Attitudes toward insurance companies, by gender, January 2016
                                                                  • Millennials are most likely to trust insurance companies
                                                                    • Figure 30: Attitudes toward insurance companies, by generation, January 2016
                                                                  • Insurers are doing well with parents
                                                                    • Figure 31: Attitudes toward insurance companies, by parental status, January 2016
                                                                  • Hispanics trust insurance companies
                                                                    • Figure 32: Attitudes toward insurance companies, by Hispanic origin, January 2016
                                                                  • Agents are preferred to websites for information
                                                                    • Figure 33: Preferred source of information, by generation, January 2016
                                                                  • High earners prefer agents
                                                                    • Figure 34: Preferred source of information, by household income, January 2016
                                                                • Appendix – Data Sources and Abbreviations

                                                                  • Data sources
                                                                    • Sales data
                                                                      • Fan chart forecast
                                                                        • Consumer survey data
                                                                          • Direct marketing creative
                                                                            • Abbreviations and terms
                                                                              • Abbreviations
                                                                                • Terms
                                                                                • Appendix – Market

                                                                                  • Market forecast
                                                                                    • Figure 35: Fan chart forecast for total insurance sales, 2010-20
                                                                                    • Figure 36: Fan chart forecast for total property and casualty insurance sales, 2010-20
                                                                                    • Figure 37: Fan chart forecast for total life insurance sales, 2010-20

                                                                                Companies Covered

                                                                                To learn more about the companies covered in this report please contact us.

                                                                                Innovations in the Insurance Market - US - April 2016

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