Description

Providing the most comprehensive and up-to-date information and analysis of the US Property and Casualty Insurance market, including the behaviours, preferences and habits of the consumer.

The majority of American adults own property and casualty insurance, not surprising given the fact that auto and homeowners insurance are often mandatory, either by law or contract. One effect of the COVID-19 pandemic has been to stress the importance of staying agile and being in tune with consumer needs. Insurers will need to find meaningful ways to continue innovating outside of pricing. Providers that can differentiate themselves by focusing on the overall value they offer consumers have the most to gain in the next normal. Those that stay complacent and neglect enhancing the customer experience risk their survival in an intensely competitive industry.

41% of consumers say higher premiums would cause them to switch P&C providers and people are more than willing to find a new insurer if it means saving money. Providers should look to reward consumers with loyalty incentives to increase engagement and make sure that they retain the customers they already have. Consumers who feel like they are getting the best prices, on top of being rewarded for their loyalty, would be less likely to switch providers and stay loyal to their provider.

Read on to discover more details or take a look at all of our US Financial Services market research.

Quickly understand

  • The impact of COVID-19 on consumer behavior and the property and casualty insurance market.
  • Property and casualty insurance ownership.
  • Bundling and switching motivators.
  • Attitudes toward property and casualty insurance.
  • Property and casualty insurance market share.
  • Global property and casualty insurance market share.

Covered in this report

Brands: State Farm, Berkshire Hathaway, Progressive, Allstate Insurance, Liberty Mutual, Travelers, USAA, Chubb Ltd, Farmers Insurance, Nationwide Corp.

Expert analysis from a specialist in the field

Written by Amr Hamdi, a leading analyst in the Food & Drink sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

The P&C industry currently sits in a promising spot. What with mass vaccinations underway and states easing restrictions, traffic volume has been increasing again. Home prices have also risen due to significant demand despite the financial impact of the pandemic. As consumers become more confident, a return to the spending behaviors that entail owning a P&C policy should follow. As for their attitudes towards P&C providers, the three pillars remain constant: fair prices, excellent customer service and a positive brand reputation.

Amr Hamdi - Finance AnalystAmr Hamdi
Finance Analyst

Table of Contents

  1. Overview

    • What you need to know
    • Key issues covered in this Report
    • Definition
    • COVID-19: market context
    • Economic and other assumptions
  2. Executive Summary

    • Top takeaways
    • Ideal P&C insurers in the next normal will provide value through personalized offerings, digital solutions and exemplary customer service
    • Providers should reward loyalty in a high-switching marketplace
      • Figure 1: Top causes of P&C insurance switching, January 2021
    • Digital is a key differentiator when seeking the business of young consumers
      • Figure 2: Usage of mobile capabilities through P&C provider, by generation, January 2021
    • Market overview
    • Impact of COVID-19 on property and casualty insurance
      • Figure 3: Short-, medium- and long-term impact of COVID-19 on property and casualty insurance, April 2021
    • Opportunities and challenges
    • While low prices are king, a customer-centric approach should be critical
    • Innovation is no longer an option, but a necessity for P&C insurers
    • Continue leveraging smart partnerships that provide value for consumers
      • Figure 4: Hippo partners with Xfinity, June 2019
  3. The Market – Key Takeaways

    • Net premiums written grew by 3.5%, totaling $634 billion for the P&C insurance industry
    • State Farm remains the biggest P&C insurer, with a 9% market share
    • Homeowners insurance premiums continued growing, as renters stagnated
    • Consumers are continuing to drive more – Another good sign for auto insurers
  4. Market Size

    • Net premiums written grew by 3.5%, totaling $634 billion for the P&C insurance industry
      • Figure 5: P&C insurance industry income analysis, in current dollars, 2015-19
    • State Farm remains the biggest P&C insurer, with a 9% market share
      • Figure 6: Top 10 writers of property and casualty insurance, by direct premiums written, 2020
    • Homeowners insurance premiums continued growing, as renters stagnated
      • Figure 7: Average premiums for homeowners and renters insurance, in current dollars, 2008-18
    • Consumers pay over $1,000 a year for auto insurance
      • Figure 8: Average auto insurance expenditures, in current dollars, 2008-18
    • Impact of COVID-19 on property and casualty insurance
      • Figure 9: Short-, medium- and long-term impact of COVID-19 on property and casualty insurance, April 2021
    • Lockdown
    • Reemergence
    • Recovery
    • COVID-19: US context
    • Learnings from the last recession
  5. Market Factors

    • Lower unemployment rates mean more confident consumers
      • Figure 10: Consumer confidence and unemployment, 2000-January 2021
    • Consumers are continuing to drive more – Another good sign for auto insurers
      • Figure 11: Seasonally adjusted vehicle miles traveled by month, January 2015-January 2021
    • Climate change remains a long-term threat to P&C insurers
  6. Market Opportunities

    • Being open to more partnerships can further P&C brands’ digital footprint
      • Figure 12: Usage of mobile capabilities through P&C provider, by generation, January 2021
    • Parametric policies could help mitigate climate risk
    • P&C insurers should look to target the growing homesharing market
      • Figure 13: App usage and interest in past year, January 2021
  7. Companies and Brands – Key Takeaways

    • USAA collaborates with State Farm to settle subrogation claims via blockchain
    • Metromile continues to find its niche in the pay-per-mile space, but competition could spell trouble
      • Figure 14: Metromile direct mail, December 2019
    • Liberty Mutual uses AI to prevent workplace injuries through its ErgoValuatorTM app
      • Figure 15: Liberty Mutual’s ErgoValuatorTM, November 2020
  8. Competitive Strategies

    • Embracing innovative technologies will set apart P&C insurers in the future
    • Metromile teams up with Ford for easier access to usage-based insurance
      • Figure 16: Ford partners with Metromile, September 2020
    • Lemonade uses AI to power its focus on speed and simplicity
      • Figure 17: Lemonade, Get insurance in 90 seconds with Lemonade’s app, July 2018
    • AmFam’s KnowYourDrive incentivizes safe driving with behavioral-based telematics
      • Figure 18: American Family Insurance, KnowYourDrive, March 2021
  9. The Consumer – Key Takeaways

    • Majority of consumers own one P&C policy, with auto insurance the most popular one
    • Over half still prefer to bundle their policies with one insurer
    • Consumers still focus on price – Providers need to change the conversation to focus on value
    • Customer service still matters
    • A third of Millennials would pay more for a policy if the company had a great reputation
  10. What the Future Holds for P&C Customers

    • Consumers will be looking for more flexible auto coverage
    • Home insurers should check in with customers considering renovating their homes
    • Renters could look to transition into homeownership to take advantage of the current low-rate environment
  11. Insurance Ownership

    • Majority of consumers own one P&C policy, with auto insurance the most popular one
      • Figure 19: Current property and casualty insurance ownership, January 2021
    • Gen Zers and Millennials are less likely to own auto and homeowners policies
      • Figure 20: Current property and casualty insurance ownership, by generation, January 2021
  12. Bundling Habits

    • Over half still prefer to bundle their policies with one insurer
      • Figure 21: Bundling behaviors in the past two years, January 2020 and January 2021
    • Gen Zers and Millennials are the least loyal to their providers
      • Figure 22: Bundling behaviors, by generation, January 2021
    • Renters policyholders are more likely to be with different companies compared to auto and homeowner policyholders
      • Figure 23: Bundling practices, by P&C policy type, January 2021
      • Figure 24: Progressive renters insurance email, January 2021
  13. Switching Behaviors

    • Auto
    • Nearly a quarter of consumers have switched policies in the last two years
      • Figure 25: Likelihood to switch auto policies, January 2021
    • Millennials are most frequent auto insurance switchers
      • Figure 26: Likelihood to switch auto policies, by generation, January 2021
    • Home
    • Switching a homeowners policy is the least common across P&C insurance
      • Figure 27: Likelihood to switch home or condo policies, January 2021
    • Millennials are more willing to switch their homeowners policy if it means better value
      • Figure 28: Likelihood to switch home or condo policies, by generation, January 2021
    • Renters
    • A third of renters have switched in the past two years
      • Figure 29: Likelihood to switch renters policies, January 2021
  14. Attitudes toward Switching Providers

    • Consumers still focus on price – Providers need to change the conversation to focus on value
      • Figure 30: Top causes of P&C insurance switching, January 2021
    • COVID-19 changed driving habits – But not significantly
      • Figure 31: Top causes of P&C insurance switching, January 2021
    • COVID-19 has made consumers embrace digital when it comes to their insurance
      • Figure 32: Usage of mobile capabilities through P&C provider in the past two years, January 2021
    • Gen Zers and Millennials prefer a mobile app experience
      • Figure 33: Usage of mobile capabilities through P&C provider, by generation, January 2021
  15. Purchasing Behaviors

    • Consumers still prefer traditional ways of buying P&C insurance
      • Figure 34: Interest in using nontraditional companies or payment methods, January 2021
    • Younger consumers are more open to nontraditional providers
      • Figure 35: Interest in using nontraditional companies or payment methods, by generation, January 2021
    • Gen Zers and Millennials most interested in usage-based insurance
      • Figure 36: Interest in usage-based insurance, by generation, January 2021
    • …yet they remain skeptical about sharing data with their insurers
      • Figure 37: Interest in sharing home or auto data for discounts, by generation, January 2021
  16. Personal Data and Telematics

    • A third of consumers would share their data to get a policy discount
      • Figure 38: Interest in telematics or smart home technology, January 2021
    • Almost 30% of consumers would use smart technology to protect their property
      • Figure 39: Travelers teams up with Amazon, October 2018
  17. Factors when Choosing a P&C Insurer

    • Quality customer service remains a key factor for 61% of consumers
      • Figure 40: Top factors when choosing a P&C insurer, January 2021
      • Figure 41: Top factors when choosing a P&C insurer, by generation, January 2021
    • Digital capabilities are a low priority when choosing an insurer
      • Figure 42: Importance of digital capabilities through P&C provider, by generation, January 2021
    • Nearly half of consumers look for bundling discounts from an insurer
      • Figure 43: Importance of discounts through P&C provider, by generation, January 2021
    • 35% of consumers acknowledged receiving credit from their insurers during the pandemic
      • Figure 44: Knowledge of receiving a credit from P&C insurer during COVID-19, January 2021
    • A third of Millennials would pay more for a policy if the company had a great reputation
      • Figure 45: Attitudes toward P&C insurers, by generation, January 2021
      • Figure 46: P&C insurers’ share of social spend, January 2021
  18. Appendix – Data Sources and Abbreviations

    • Data sources
    • Consumer survey data
    • Direct marketing creative
    • Abbreviations and terms
    • Abbreviations
    • Terms

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