New research claims the key to driving long-term relationships in home insurance is less about pricing and more about great services and reputation.
The median age of first-time home buyers in the US is now 33 years old, which is the oldest age since the National Association of Realtors began tracking this in 1981.
In the new J.D. Power 2020 U.S. Home Insurance Study report, it claims establishing lifetime home insurance customers depends on capturing them as early as possible and converting renter insureds to homeowner insureds.
It also claims that the key to long-term relationships is based on great service and reputation, not pricing.
The report claims that two-thirds of homeowners insurance companies who picked a brand based on good service say they will definitely renew. This stance was seen in 64% of those insuring with a good reputation and 64% for convenience.
Price was actually one of the lowest motivators for renewal, it claimed.
Furthermore, J.D. Power claims millennials are more in favour of an insurer where they had good service experience, compared to boomers. Around 38% of millennials said they would pick an insurer due to good service, where only 34% of boomer said the same.
J.D. Power senior consultant of insurance intelligence Robert Lajdziak said, “Homeowners insurance customers are the single-most-valuable group of personal lines customers for P&C insurers.
“They have a significantly higher bundling rate, 38% higher product penetration beyond home and auto, and their tenure is twice the length of a monoline auto customer. The potential ‘lifetime customer value’ of homeowners makes meeting their needs and motivations to renew a critical task for the industry.
“This dynamic will be important to watch as InsurTech start-ups—which have recently gained traction in the renters insurance marketplace by offering low prices—gear up with unique value propositions that will challenge traditional insurers that are more focused on building relationships and delivering strong customer service.”
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