Emerging Auto Insurance Issues for 2016

Emerging Auto Insurance Issues for 2016

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What will the new year bring? While no one has a crystal ball, as you look into the past and the present, you can try to extrapolate the future of your industry. As you develop insurance marketing strategies for 2016, examine the trends in the auto industry, the types of drivers, the vehicles they own and the accidents they're having, to understand the insurance issues that you and your customers will face in the coming year.

What's Happening in the Auto Insurance Industry?

The auto industry is changing. From self-driving cars to increasingly complex hybrid and electric vehicles, both vehicles and the industry overall are getting more complex.

According to the Insurance Journal, in 2015, auto insurers experienced increasing claims costs, and this could lead many companies to raise their rates in 2016. Were these claims a product of temporary conditions, or will they last? It's likely that these more expensive auto claims will stay for the longer-term, since they're caused in part by more complicated vehicles with complex electrical components. There's also been an increase in the average number of parts replaced as part of each auto claim. As the parts replacements increase, so too have labor hours to install them. Pricier auto claims may mean insurance changes for consumers this coming year.

Recent research by Verisk Analytics indicates that additional trends in the auto insurance industry include concepts such as accident avoidance, in which insurance companies work with their customers to prevent claims before they occur.

Insurance Marketing Strategies for 2016

If insurance rates are rising, this is a time to embrace new insurance marketing strategies. First, understand that your audience is changing. More women are making buying decisions for auto insurance, and you will see a larger and larger wave of Millennial buyers entering the market. Today's insurance marketing strategies should incorporate information about consumer trends and habits. Learn to pinpoint those who have good habits and work with them. With additional education and graduated licensing, many of your younger clients come to you well-prepared to be safer drivers. At the same time, your older client base is growing, and they're experiencing more challenges driving as they age.

If your insurance rates move up, you need to educate your clients and let them know how their good habits can reduce their claims and their insurance rates. Position yourself as a provider of education, teaching your customers through blogs and conversation about the changes facing the auto insurance industry today. Provide excellent customer service to help them find the least expensive insurance options.

According to Intellimec, usage-based insurance can help consumers manage their auto insurance costs. If people don't drive much or very far, this pay-as-you-go model also tracks how people drive, giving points for good practices in acceleration, braking, and speed. Consumers are more willing to give up some of their personal information for a potential discount in rates. As an insurance business, you benefit as well: you'll attract safer drivers and increase customer loyalty.

As you plan for your insurance company's future, get support from other insurance agencies who are working with the same challenges that you're experiencing. With the American Agents Alliance, you'll have the opportunity to share information and network with professionals in your field. Contact us today and learn about our many membership benefits

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