For most personal lines insurers and most insurance buyers, this leaves just one other customer touchpoint: policy renewal, which occurs only once or twice a year. Renewal may sometimes be an opportunity for an insurer (or more often a broker) to engage in a helpful discussion with the policyholder about the coverage required in the year ahead. But more often – and particularly in the case of auto insurance – it is a purely financial transaction and, recently, quite a painful one for most policyholders.
At a time of steeply rising premium rates, it is not surprising that resentment of insurers may increase. Rates rises have been well above the broader rate of inflation for many lines of business and they can appear to present a “heads I win, tails you lose” proposition for insurers. If the policyholder had made a claim during the prior policy period, this will be presented as the reason the premium has gone up. But if no claim has been made, the cost of coverage will still typically rise.
Car and Home Insurance Rates Have Soared Well Above Broader Inflation Measures Car and Home Insurance Rates Have Soared Well Above Broader Inflation Measures
30.0
Private Passenger Auto
25.0
Homeowners
20.0
15.0
10.0
5.0
0.0
-5.0
Source: U.S. Bureau of Labor Statistics
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