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Many New Trends in Personal Lines

Self-driving cars could mean reduced income from auto insurance, members of the Personal Lines Practice Group agreed at a recent teleconference. Other issues included dog bites, the younger generation with little interest in home ownership and jewelry, and videotaping homes of major personal lines client

Here are some of the comments:

Self-Driving Cars

J.D. Powers estimates that there will be about 10 million driverless cars in use by 2020. While this is a small percentage of the 1.4 billion cars on the road, it may have an impact on auto books at insurance agencies.

“A lot of younger drivers are waiting until they are 18 to get licenses instead of getting them at 16 because their parents don’t want to pay the premiums. Or they are using Uber and similar services and not driving at all. Today they have the convenience of not needing to drive in a city, and they aren’t driving as much as they used to.

“We are seeing some of this, but it is less dramatic because we are outside a metropolitan area. Everyone here still needs a car. In the cities, we are seeing clients turning to MetroMile or Lemonade. Auto insurance based on the mileage component has unbeatable premiums.”

“The scariest part is that I don’t think even the carriers know what is coming. You will still have to insure your vehicle, even if it’s driverless. There will be some sort of risk but we don’t know it will be. Will medical payments and physical damage fall back to the manufacturers? Or will the manufacturer be able to say that the vehicle was being used during inclement weather and the owner should not have been on the road?”

“Consumers are not fully confident of automated driving systems. Almost 50 percent say they ‘would’ or ‘probably would’ try driverless cars. The younger generation is much more trusting of technology.”

“The future is likely to bring more auto-sharing as well as self-driving vehicles. This also will impact insurance policies.

Changing values

“The younger generation doesn’t want to buy homes because they don’t want to be strapped to anything permanent. We are seeing apartments galore.

“We see young people coming out of school with student loan debts and reluctant to buy homes.”

“Values are changing with the generations. When I started in the industry, coverage for jewelry and collections was a big deal. This is still true of those 55 and older but we don’t see the same interest in the wealthy groups that are emerging. My children, for example, don’t want silver or jewelry.”

“We are spending more time vetting a client before we write a proposal. If prospective clients don’t value insurance, they won’t value the protection received from their insurance policies. They will end up going online and looking for something cheaper.”

 Keeping in Touch with Clients

“We offer the videography for free but we’ve had clients say they will pay for it. When we ask them if they want it again the following year, they always say ‘yes.’ You wonder whether you need to do it again, but we’re realizing that it really is necessary and people value it.  We’re upselling through the use of video.”

“Many of our clients don’t want to meet face-to-face and prefer to do everything by email and telephone. We tried videotaping but did not see a big response. But anyone who has gone through a natural disaster will recognize what a benefit it is.”

“We’re posting answers to customer questions on our blog. This will be a reference, so we can refer other clients with the same questions to the blog entry.”

“We ask clients to fill out a survey every other year. We decided yearly was too often, so we call them on alternate years. We’re finding that some clients haven’t even thought to tell us about a major home renovation.”

Generating new business

“We’ve found social media is great for branding but it doesn’t bring qualified leads. Ninety percent of our referrals come from real estate agents, lenders and title companies. This is where we need to focus in the future. We don’t offer any inducements to them. Their primary interest is to have us take care of the insurance needs so the sale won’t fall through because of an unresolved issue. After the flood zone remapping, we went into various real estate offices and spent 10 to 30 minutes on a Q& A about elevation certificates, grandfathered provisions and assumption of a policy at the act of sale. This sparked an interest and real estate agents realized we could help them. We pay $760 a year for an ad in a brochure that regional real estate agents give to their prospects.”

“We have added two personal lines producers and give a bonus of 50 to 60 percent of the annual growth in their books of business. One producer is ‘the only summer intern we have had success with’ as a full-time employee. She was a college athlete and is very competitive. The other is an account manager who wanted to move into sales. We’ve given up on college recruiting fairs and focus on someone with more experience. You can’t walk in looking like you’re 18 years old, especially if it’s a commercial lines account.”

Directors and officers liability

“If clients serve on nonprofit boards, alert them to find out whether the nonprofits have directors and officers liability insurance. Clients are always appreciative when we suggest that they check this, and it can lead to selling an umbrella policy.”

 

Dog bites

State Farm paid more than $10 billion in dog bite claims in 2016. California had the largest number of dog bite claims.

 

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