Although the cost of owning P&C insurance has risen over the years, carriers still have the tools to mitigate the risk of customer churn, while unlocking key growth segments in the process.
The tried-and-tested bundle deal remains the most effective retention tool, especially in today’s insurance climate marred by rising premiums. Nearly 60% of Boomers, the most active group when it comes to P&C insurance ownership, consider the prospect of bundling when buying multiple policies from one provider. While no doubt a significant figure on its own, carriers must strive for this consideration to be even higher. As such, providers must not lose sight of these older consumers’ outreach preferences, with a balance of digital communications and human touch the winning combination to gain the attention of this segment.
Telematics products, such as usage-based insurance (UBI) and behavioral-based insurance (BBI) are yet to conjure up exciting adoption levels just yet, although a substantial amount of interest in these offerings exists across all age groups, as well as among new Canadians. As the price of owning P&C insurance continues to rise, carriers have the golden opportunity to convert this interest into adoption – boosting customer loyalty and broadening their acquisition reach in the process.
This report looks at the following areas:
- Market factors impacting the P&C insurance sector
- P&C insurance ownership
- How consumers prefer to interact with their insurer
- Switching and insurance behaviors
- Most important factors in the choice of insurer
- Attitudes toward P&C insurance
Through building strong relationships and delivering exceptional value, carriers can reduce churn while fostering long-term loyalty in a fiercely competitive space.
Amr Hamdi, Senior Analyst – Financial Services
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Executive summary
- What consumers want and why
- What consumers want & why
- South Asian and Chinese Canadians have contrasting ownership profiles
- Graph 1: P&C insurance ownership, by new Canadians, race, and ethnicity, 2024
- Newcomers' lower ownership levels across P&C insurance opens a plethora of engagement opportunities for carriers
- Mobile claims filing can offset customer defection
- Millennials are the least likely to have leveraged their insurer's mobile app for claims filing
- Gen Zers are less likely to consider the value of the bundle when buying multiple policies
- Gen Zers are significantly less likely to consider the value of the bundle when buying multiple policies
- Market predictions
- Opportunities
- Converting smart home device interest into adoption can yield higher satisfaction, particularly among cost-conscious segments
- Graph 2: interest in smart home devices for a policy discount, by new Canadians and province, 2024
- With newcomers leaning on friends and family to guide their insurance journeys, referral incentives can boost acquisition prospects
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Market dynamics
- Market drivers
- Newcomers remain an attractive growth segment for carriers, but brands must demonstrate more proactive engagement with this group
- Graph 3: distribution of foreign-born population by region of birth, 1996-2036 (projected)
- Elevated car insurance prices will drive greater consideration of telematics products
- Graph 4: consumer price index, 2023-24
- Canada's population is ageing
- Graph 5: projected population growth scenarios among 65 and older, 2024-2073
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Consumer Insights
- The P&C insurance consumer: fast facts
- P&C insurance ownership
- Auto insurance is the most popular P&C product
- Graph 6: P&C insurance ownership, 2024
- P&C insurance ownership and life stage go hand-in-hand
- Graph 7: P&C insurance ownership, by generation, 2024
- Carriers must adapt to cater to the evolving insurance needs of its younger clientele
- Communication preferences
- The majority of consumers would like to hear about additional P&C offers via email
- Nearly 70% of consumers would like to hear about additional offers via email, while traditional channels like mail and phone are less preferred
- While email is favored by all ages, older consumers show the highest preference toward direct mail
- Graph 8: preferred channels for additional P&C offers, by age, 2024
- Email is the go-to channel of communication across all provinces
- Graph 9: preferred channels for additional P&C offers, by province, 2024
- Switching behaviors
- The P&C insurance market remains rife with switching, as 49% of consumers have started a relationship with a new carrier in the past three years
- Graph 10: reasons for switching insurers, 2024
- As consumers age, they become less likely to consider life events when switching carriers
- Graph 11: consumers who switched insurers due to a personal life event, by generation, 2024
- Unsatisfactory claims handling is a strong defection driver
- Graph 12: reasons for switching insurers, by age, 2024
- P&C insurance behaviours
- Mobile app adoption across a wide array of insurance behaviors continues to grow
- Graph 13: mobile app adoption over time, 2022 and 2024
- While adoption levels are low across UBI and BBI, interest levels are encouraging for the future of telematics
- Graph 14: telematics adoption and interest, 2024
- 18-34 year olds are more interested in UBI than BBI, while older consumers would largely consider the latter
- Graph 15: interest in telematics, by age, 2024
- New Canadians drive the bulk of interest and adoption across telematics
- Graph 16: telematics interest and adoption, by new Canadians, 2024
- Most important factors when seeking an insurer
- Beyond price, customer service quality is the most important factor consumers consider when seeking a provider
- Graph 17: most important factors in choice of insurer, 2024
- As consumers age and enhance their insurance literacy, bundling discounts become of greater importance when selecting a carrier
- Graph 18: importance of bundling and sign-up discounts when choosing insurers, by age, 2024
- Frictionless digital solutions are an expectation at this point, and carriers must continue providing them to retain younger clientele
- Graph 19: importance of digital solutions when choosing insurers, by generation, 2024
- P&C insurance behaviours and attitudes
- Carriers can drive more business across their renters line via landlord partnerships
- Graph 20: mandatory renters insurance purchase, by new Canadians and age, 2024
- Just 41% would recommend their provider to others, indicating that carriers still have work to do when it comes to customer satisfaction
- Graph 21: P&C insurer recommendation, by race, ethnicity, and generation, 2024
- Willingness to share home/auto data is largely contingent on the potential discounts consumers stand to gain
- Graph 22: willingness to share home/auto data for a discount, by generation, 2024
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Competitive strategies
- Marketing and advertising
- TD raises awareness of the exclusive savings alumni and members of professional groups stand to gain from bundling
- belairdirect highlights its expertise in claims handling via paid Facebook
- With Desjardins' Ajusto, safe driving behaviors can help customers save on their auto insurance
- Alberta residents display the highest interest in both usage-based and behavioral-based insurance programs
- Graph 23: interest in telematics, by province, 2024
- Sonnet leverages online display ads to educate customers about tenant insurance
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Appendix
- Consumer research methodology
- Consumer research questions
- Generations
- Abbreviations and terms
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