Traditional home insurers appear to be in need of an image change, and that, in turn, could create a big opportunity for InsurTech startups, according to the latest J.D. Power U.S. Home Insurance study.
Approximately 74 percent of their customers surveyed said that the industry needs some improvement, with 13 percent suggesting the sector needs “radical improvement.” As well, overall customer satisfaction with home insurance declined for the first time since 2015.
According to the survey, products and coverage; underwriting; and claims are the points in homeowners insurance with the greatest perceived need for improvement. That means InsurTech competitors are nipping at the heels of their carrier competitors. The J.D. Power study points out that InsurTech startups “have been increasingly active in creating alternatives to the traditional offerings in these areas.”
“Home insurance seems to be approaching an inflection point as customers expect more value for their premiums – and have demonstrated they are willing to switch insurance companies for it,” Robert Lajdziak, Senior Consultant, J.D. Power Insurance Intelligence, said in prepared remarks. “Customers are more likely to use digital channels when interacting with their home insurance companies and are now shopping to find the most convenient experience that meets their expectations – which are often set by other companies with which they do business.”
Lajdziak added that he sees customer expectations as being reset, leaving traditional carriers experiencing “a serious need” for improvement unless they want to lose out to the competition.
Among additional study findings:
J.D. Power compiled its study based on responses from 13,323 homeowners and renters through online interview conducted from June to July 2019.
Source: J.D. Power