Digitizing the Auto Insurance Industry Can Improve Operational Efficiency: Report

Digital is the “name of the game” when it comes to attracting auto insurance clients, according to an update from Notarize, which helps consumers with signing and notarizing “life’s most important documents online.”

The Boston-based financial services firm writes in a blog post that the convenience of transacting online “can’t be matched by traditional brick and mortar insurance providers.”

The company also mentioned that moving to digital auto insurance “doesn’t mean that brick and mortar auto insurance companies need to go completely virtual.” According to Notarize, a combination of agent and digital offering offers “the most flexibility for consumers with different preferences.”

In the firm’s auto insurance study that rates auto insurance providers, JD Power pointed out that “satisfaction scores improve about 100 points or more when customers say that completing tasks is ‘very easy’ vs. ‘somewhat easy.’”

The study also indicates that consumers now have “dramatically higher expectations.” Not only do they want to be able to get digital auto insurance, they “want it to be fast, convenient and intuitive.”

The update from Notarize further noted that these expectations are “driven by the massive shift in online activity that happened as a result of Covid-19, but even as consumers are slowly shifting back to everyday in-person activities, their interest in digital options is by no means going away.”

If anything, the innovations that they’ve experienced when interacting with companies like Amazon and Google have “raised the bar on what kind of experience they should be getting with every company they interact with, including auto insurers,” the Notarize team wrote in a blog post.

As explained in the update, digital insurance provides “a host of benefits for consumers and insurers: it’s faster, more flexible and convenient, and data can be kept safely in a secure database rather than on sheets of loose paper.”

As mentioned in a blog post by Notarize, the US is “actually lagging compared to other regions (such as Europe) when it comes to moving online.”

Research from McKinsey shows that “while 70% of European auto insurers have a digital options, only 20% of companies in the US have online offerings.” However, the consumer demand for digital goods and services “is surging, and the report urges auto insurers to focus on digital as the future of customer acquisition is online,” the update noted.

As noted in the blog post, younger generations in particular “want online auto insurance options.” A study found that 63% of millennials and Gen Z customers “prefer online auto insurance.”

Even for older generations, there are “major opportunities for auto insurance companies to capture new customers online.”

Notably, 69% of all auto insurance consumers searched online “as a first step in their process, and 68% of auto insurance consumers don’t have a particular provider in mind.” The report further noted that this combination of online-first and lack of brand loyalty “means that the company with the easiest online process and best online offerings will have the advantage.”

As mentioned in the update:

“Traditional auto insurance companies are not only competing with other local insurance providers, they are competing with a host of digital-first auto insurance companies, too. These companies have the benefit of a highly intuitive design and a host of beneficial features built to attract and close online auto insurance shoppers.”

According to the update from Notarize, creating a digital presence “doesn’t have to mean reinventing the business.”

They also mentioned that auto insurers can “get up and running with a digital website and app that starts out with only a few key features, such as information about different insurance products and prices, the ability to book appointments, and a way to securely facilitate insurance purchases.”

Although some of the larger or more established digital providers offer a lot more than these basic services, even simple digital auto insurance offerings “provide a competitive (and hybrid) advantage for brick and mortar insurers,” the team at Notarize explained.

They also noted that if you have any notarization questions, they have “notarization answers.”

At Notarize, they pride themselves on offering helpful resources in order to “demystify notarization.”

However, the firm clarified that they are “not lawyers and don’t give legal advice.”

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