Cornerstone Insurance Agency Blog
Insurance and auto insurance companies face significant challenges in addressing societal trends in services, needs, and technology. Traditional auto insurance, a '120-year-old' established industry, is maneuvering its ways along with the challenges as it faces various generations' demands.
Shifting Auto Insurance Demographic
Generation X and Boomers tend to purchase household services, insurance, and financial products compared to their younger counterparts. These two groups are at the life stage where financial stability and work tenure are at its peak, enabling insurance and possessions. They are willing to shell out large sums of money for insurance like auto insurance to protect their properties.
On the other hand, the younger generations of Millennials and Generation Z might overcome the older generations’ purchasing power and financial security. These adventurous types are slowly building their way towards financial security through innovation and demand more comprehensive insurance coverage.
Newest Technologies for Vehicle Security
Currently, nearly half of the generations who own or rent a car have at least one type of latest safety or convenience technology in their vehicles. The younger generations (Millennials and Gen Z) tend to purchase many and even higher technology in collision avoidance systems, surround-view systems, automatic parking, and mechanical braking.
As the purchase of technology tweaks for vehicle security rises, the auto insurance premiums may go down, thanks to lesser accidents and vehicle damage. However, the cost of repair and update for such automation types may be higher than the savings acquired from a lower frequency of accidents.
Latest Data Sources
The increasing introduction of data source innovations in vehicles like auto-tracking devices may enable underwriting and car pricing. These innovations that affect the car's mileage, location, and driving behavior, might lower auto insurance premiums but could provide less coverage because of less predictability.
All age groups will still prefer to stick with the traditional six-month term with a set premium for an insurance policy. They also liked using a smart app device that delivers real-time alerts and advice about driving conditions.
Proprietorship vs. On-Demand Alternative Transport
There has been thriving popularity with the use of alternative transport options, instead of car ownership. About 30% of Gen Z and Millennials tried alternative transport like rideshare, rentals, and public transport to save money. This increased shift in transport options from vehicle ownership to alternative transportation decreases the demand for personal auto insurance and vehicles purchase.
On the other hand, auto manufacturers and third party services address this challenge by offering all-inclusive vehicle subscription services. This subscription enables the owner to switch vehicle types periodically and pay monthly premiums for comprehensive coverage. Instead of sticking with the typical auto insurance company provisions, about ¼ of the generations purchase a vehicle with its inclusive insurance subscription.
Emerging Auto Insurance Providers
The insurance that goes through agents/brokers or directly via the insurer's website is the most preferred vehicle purchase method. However, an emerging trend of obtaining auto insurance, including vehicle purchase, is provided directly by car manufacturers, dealers, or car shopping websites. The younger generations (Gen Z and Millennials) express interest in purchasing the latter type of insurance acquisition.
Insurance companies are faced with various challenges to meet the changing and growing needs of the generations in terms of auto insurance. As trends happen, get your car protected and covered innovatively through Cornerstone Insurance Agency.
At Cornerstone Insurance Agency, we put our clients first by offering them policies that they can afford. Having insurance is a necessity nowadays and we're here to help you out. Learn more about our products and services by calling our agency at (888) 661-8831. You can also request a free quote by CLICKING HERE.
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Cornerstone Insurance Agency
214-11 Northern Boulevard
Bayside, NY 11361
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