1.
Digital switchers are
less motivated by
price alone…
69%
84%
34%
18%
Cite price as a motivation
Are motivated by a multipolicy
discount or loyalty program
Phone
Agent
DIGITALS ARE LESS LOYAL AND MORE COSTLY
TO SERVE THAN NONDIGITALS
They switch insurers more
frequently and also take
more time to decide…
Research switching in the first
9 months of buying a policy
Switch after starting to research
14%
7%
70%
47%
2.5xless likely to make
a same-day switching
decision, taking up to 2
weeks to decide
Their switching process is
more complex, involving
more channels…
… and they heed more —
and different — influencers
21%
6%
10%
3%
30%
more active
across all
channels
3xas likely to
take broker or agent
recommendation
3xas likely to
take employer
recommendation
Online
Especially price comparison
sites (35% of digitals
vs. 25% of nondigitals)
How
Digital Switchers
Are Disrupting US Auto Insurers
Digitally adept consumers,
or DIGITALS,
are already 20%
of the $180 billion
US auto insurance market
and are growing rapidly
digitals nondigitals
MEET THE DIGITALS
They represent the
trend toward
simplified, “fair”
insurance
65%
45%
Inclined to switch to a
usage-based (pay-as-you-drive)
program
DIGITALS LEAD THE
SHIFT TO
ALTERNATIVE
PROVIDERS AND
CHANNELS
Today, digitals are
more willing to buy
insurance from:
38%
17%
18%
8%
42%
24%
$
Banks
Online services and channels,
such as Amazon and Google
Household services
companies, like telcos
and home security firms
And in 5 years, the fight for
digitals’ wallets will escalate:
Expect to purchase
insurance directly
from a carrier
77%
52%
Turn digitals’ longer decision times to
your advantage by making targeted
counteroffers
Appeal to less cost-conscious digitals
with policy bundling and
multipolicy offers
BCG 2016 research on auto insurance switching trends in the US; BCG 2015 online survey of U.S. auto insurance
consumers’ decision-making behavior and preferences when switching insurers.
SOURCES
WHAT INSURERS MUST DO
Challenges Opportunities
Insurers’
advertising and
brand expenses
are rising, while
digitals are
pushing lifetime
values lower
Insurers aren’t
equipped to sell to
multichannel
digitals in a
cost-efficient way,
making it harder to
counter disruptive
providers
Reevaluate ad, technology, and agency
costs to identify true differentiators
Enlist brand advocates among existing
customers, and tap broker/agent
relationships to convert and
retain digitals
$
Inclined to switch to a provider offering a
fully online buying and service platform
$
A multigenerational wave of
technology adoptors that’s
growing faster than
millennials and represents…
33% 25% 5%
of
millennials
of 31- to
54-year-olds
of those 55
or older
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