Does your auto insurance marketing strategy focus on retention?

Key takeaways

• Insurance shopping is increasing—even among good drivers.
  More drivers, including typically low‑risk ones, are “insurance hopping” due to perceptions of overpaying and easy access to online quote tools. This creates retention challenges for insurers.
• Driving data helps insurers retain their best customers.
  By using telematics and behavioral driving data, insurers can better predict risk and offer more accurate pricing, rewarding good drivers with lower premiums and improving loyalty.
• Personalized pricing based on real behavior boosts customer satisfaction.
  Traditional rating factors (e.g., age, ZIP code) are less effective than data-driven risk assessments. Using actual driving behaviors gives consumers fairer, more tailored rates, which strengthens loyalty.
• Telematics programs benefit both insurers and drivers.
  Mobile telematics not only helps insurers identify and retain low-risk drivers but also encourages safer driving habits through transparency and behavior-based pricing.

Introduction

For top auto insurers, retaining the best drivers at your agency is key. But how do you increase customer loyalty in an environment where more drivers are seeking new insurance plans than ever before?

Shopping for new insurance surged in 2020, and many consumers gravitated to large, well-known auto insurers for lower rates. Why? Because increased remote work opportunities left consumers wondering if their rates should drop as they worked from home and their automobiles sat in their garages.

For today’s drivers, price is the most crucial factor — a priority accelerated by inflation — coupled with a desire for policy pricing based on individual risk. That’s where insurance driving data comes in.

Halt the “insurance hopping” trend 

Customer retention is one of the biggest challenges for insurers today. J.D. Power reports that carriers still have a 20% satisfaction deficit compared to March 2020 – and only about a third of customers are somewhat satisfied with their insurance policy.

Auto insurance shopping norms are changing. Historically, high-risk drivers were most likely to “shop around” for new insurance plans. But now, good drivers are shopping around, too. A recent survey found that 58% of drivers believe they overpay for car insurance, and 29% recently switched companies. Of those surveyed, 68% sought car insurance quotes within the last year.

While only “bad drivers” used to look for new insurance plans, increased access to digital tools and online shopping is making it easier for your customers to search for better rates elsewhere. This influx of insurance hopping creates a significant headache for insurers looking to double down on retaining their safest drivers.

How can you retain the best drivers? Insurance underwriting data and a strong telematics program may be the best solution.

Retain the safest driver pool 

The strongest case for insurance driving data as a solution to retention comes from its ability to predict risk based on actual behavioral data and historical claims data. With a more accurate snapshot of individual risk factors, you can provide prices that reflect good driving behaviors, offering high-value, low-risk customers better premiums than your competitors.

When it comes to your existing pool of high-risk drivers, they will receive a higher premium quote. They may be tempted to seek out lower rates elsewhere — a mutually beneficial scenario for financial health. Offering a mobile telematics program goes beyond just sorting out the good drivers from the bad. It keeps customers engaged and creates a more seamless user experience by:

• Providing a lower rate at the time of quote with the help of existing data from a platform like Arity IQ℠
• Utilizing plug-and-play technology to continuously monitor driving behavior and further reward good drivers
• Incentivizing retention of auto policy at the time of renewal

Incentivize customers with Arity 

Insurers deserve a partner with a full scope of mobile telematics programming. Partnering with Arity means easily monitoring driving trends through a mobile telematics experience. This functionality keeps customers engaged by:

• Helping them discover areas of improvement in their own driving
• Continuously reviewing risky driving behaviors
• Coaching to help the driver improve their overall score

With Drivesight, we weigh factors drivers can most control, then layer them on top of insurance claims data and other traditional factors. Arity also gives you access to previously scored drivers to better understand insurance risk at the time of quote. The result? The most accurate driving score in the industry that allows you to provide your best drivers with the prices they deserve.

When it comes to acquiring new drivers, don’t just find the best, keep the best.