“P&C insurers have been able to pull away from the apex of the pandemic relatively unscathed, but the current economic climate is shaping up a challenging 2022 for providers. For auto, inflationary pressures amid supply chain issues have ramped up the costs of replacement parts, repairs and rental cars. Homeowners has also faced a similar fate, with supply chain delays leading to higher prices of construction goods. The one constant likely to face consumers already strained by inflation is higher premiums, as providers grapple with more frequent claims due to driving habits normalizing, and larger payouts as a result of current economic conditions. Leaning into perks and incentives remains as critical as ever to sustain consumer loyalty amid rising premiums, with 2022 likely to see pronounced insurance shopping activity.”
– Amr Hamdi, Finance Analyst

This Report looks at the following areas

  • P&C insurance ownership
  • Bundling and switching behaviors
  • Drivers to switching insurers
  • Attitudes toward P&C insurance

Table of Contents

  1. Overview

    • What you need to know
      • This Report looks at the following areas
        • Definition
          • Market context
            • COVID-19: US context
              • Economic and other assumptions
              • Executive Summary

                  • Top takeaways
                    • P&C insurance ownership is dictated by life stage
                      • Figure 1: Current property & casualty insurance ownership, by age, 2022
                    • Bundling remains key in building customer loyalty, with 65% holding multiple policies with one provider
                      • Figure 2: Bundling habits over time, 2020 to 2022
                    • Prices remain top of mind for P&C customers, with a third switching as a result of premium increases
                      • Figure 3: Causes of P&C switching, 2022
                    • Market overview
                      • Figure 4: Property and casualty insurance, 2022-27
                    • Opportunities and challenges
                      • Inflation, supply chain headwinds to lead to premium hikes and increased shopping activity across auto and homeowners
                        • Push telematics adoption by emphasizing cost savings and incentives
                          • Key consumer insights
                            • Digital solutions are not a priority when choosing an insurer, but providing them is an expectation at this point
                              • Figure 5: Importance of digital when choosing a P&C Insurer, by generation, 2022
                            • More than a quarter are open to being insured by a tech company such as Amazon
                              • Figure 6: Interest in buying insurance from tech company, by age, 2022
                          • Market Size

                            • P&C insurers sustained growth despite turbulent 2020
                              • Figure 7: P&C insurance industry income analysis, in current dollars, 2015-20
                            • State Farm remains the largest US P&C insurer
                              • Figure 8: Top 10 writers of property and casualty insurance, by direct premiums written, 2020
                            • Home insurance premiums to continue rising, renters remain stagnant
                              • Figure 9: Average premiums for homeowners and renters insurance, in current dollars, 2009-19
                            • Auto insurance policyholders set to pay more in premiums in 2022
                              • Figure 10: Average auto insurance expenditures, in current dollars, 2009-19
                          • Market Factors

                            • Inflationary pressures, supply chain bottlenecks take their toll on P&C insurers
                              • Figure 11: Consumer Price Index change from previous period, 2007-22
                            • Red-hot housing market remains a boon for home insurers in the short term
                              • Figure 12: 30-Year fixed rate mortgage average in the United States, percent, monthly, not seasonally adjusted, 2019-22
                            • A return to pre-pandemic driving patterns brings with it an increase to auto premiums
                              • Figure 13: Seasonally adjusted vehicle miles travelled by month, 2015-21
                          • Competitive Strategies and Market Opportunities

                            • Lemonade pushes messaging around bundling auto and renters policies
                              • Figure 14: Lemonade auto and renters bundle ad, 2021
                            • P&C insurers highlighted the convenience of their digital solutions
                              • Figure 15: AmFam paid Facebook ad, 2022
                              • Figure 16: Lemonade paid Facebook ad, 2021
                              • Figure 17: Allstate paid Facebook ad, 2021
                            • State Farm partners with Ford to offer new vehicle owners UBI
                              • Smart home devices remain a wellspring of opportunity for home insurers
                                • Figure 18: Smart home device ownership, by generation, 2021
                              • Leverage UBI to incorporate rewards and increase customer loyalty
                                • Figure 19: Allstate Rewards email, 2022
                            • The P&C Insurance Consumer – Fast Facts

                              • Insurance Ownership

                                • Auto insurance is the most popular P&C policy
                                  • Figure 20: Current P&C insurance ownership, 2022
                                • P&C insurance ownership is largely tied to life stage
                                  • Figure 21: Current property & casualty insurance ownership, by age, 2022
                              • Switching Behaviors

                                • Auto
                                  • 26% have switched auto insurers in the past two years
                                    • Figure 22: Likelihood to switch auto policies, 2022
                                  • Gen Zers, Millennials are much more likely to have switched auto insurers
                                    • Figure 23: Likelihood to switch auto policies, by generation, 2022
                                  • Home
                                    • Homeowners policyholders the least likely to switch providers
                                      • Figure 24: Likelihood to switch home/condo policies, 2022
                                    • Millennials more likely to switch home insurers, primarily driven by home buying and refinancing activity
                                      • Figure 25: Likelihood to switch home/condo policies, by generation, 2022
                                    • Renters
                                      • More than a third of renters have switched providers in the past two years
                                        • Figure 26: Likelihood to switch renters policies, 2022
                                    • Bundling Habits

                                      • 65% of consumers hold multiple policies with a single provider
                                        • Figure 27: Bundling habits over time, 2020 to 2022
                                      • Providers still have a wellspring of opportunity with Millennials that do not bundle policies
                                        • Figure 28: Bundling habits over time, by generation, 2020 to 2022
                                    • Attitudes toward Switching Providers

                                      • Prices remain the top reason for P&C switching
                                        • Figure 29: Causes of P&C switching, 2022
                                      • A change in driving habits due to COVID-19, moving into a new home also among reasons for recent switching
                                        • Figure 30: Causes of P&C switching, by generation, 2022
                                      • Besides prices, an unsatisfactory claims experience is the biggest motivator to switch providers
                                        • Figure 31: Motivators to switch P&C provider in the future, 2022
                                        • Figure 32: Geico desktop display ad, 2021
                                        • Figure 33: USAA paid Facebook ad, 2022
                                    • Mobile Usage for P&C Insurance

                                      • Mobile app adoption continues to grow year after year
                                        • Figure 34: Mobile usage over time, 2020 to 2022
                                      • Gen Z and Millennials lean on mobile apps for their insurance needs
                                        • Figure 35: Mobile usage over time, by generation, 2020 to 2022
                                    • Interest in Nontraditional Providers

                                      • Gen Z and Millennials are significantly more likely to have used, or to be interested in using an insurtech
                                        • Figure 36: Insurtech usage and interest, by generation, 2022
                                      • 26% of consumers would consider purchasing a P&C policy from a tech company
                                        • Figure 37: Interest in buying insurance from tech company, by age, 2022
                                    • Interest in Usage-Based Insurance

                                      • Behavioral-based insurance continues to grow; mileage-based slightly falters
                                        • Figure 38: Usage-based insurance adoption over time, 2022
                                      • Younger generations lean more towards mileage-based insurance; older prefer behavioral-based
                                        • Figure 39: Usage and interest in UBI, by generation, 2022
                                    • Factors when Choosing a P&C Insurer

                                      • Quality customer service remains key to customer acquisition
                                        • Figure 40: Top factors when choosing a P&C Insurer, 2022
                                      • Over half consider bundle discounts when choosing an insurer
                                        • Figure 41: Importance of discounts when choosing a P&C Insurer, by generation, 2022
                                    • Attitudes toward P&C Insurance

                                      • Younger generations are less likely to consider bundle discounts when purchasing multiple policies from the same insurer
                                        • Figure 42: Attitudes toward bundling, by generation, 2022
                                      • Nearly 30% of Gen Zers and Millennials would pay more for a policy if the provider has a strong reputation
                                        • Figure 43: Attitudes toward P&C insurers, by generation, 2022
                                      • As telematics adoption grows, consumers are becoming more comfortable sharing home or auto data if it means more discounts
                                        • Figure 44: Interest in sharing home or auto data, by generation, 2021 and 2022
                                    • Appendix – Data Sources and Abbreviations

                                      • Data sources
                                        • Consumer survey data
                                          • Marketing creative
                                            • Abbreviations and terms
                                              • Abbreviations

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