In all the upheaval of 2020 the personal auto insurance market remained stable, yet even this market won't continue unscathed. 

“The personal auto insurance market has consistently grown over the last couple of decades and has historically been resilient through economic downturns," says Bronwyn Koopman, president of Bristol West Insurance Group, a Farmers Insurance Company. “However, with fewer people on the road because of COVID-19, auto insurance premiums remain flat, and that will impact growth," she says.

While the market will be pressured in the short term, “there is still tremendous opportunity for carriers and agencies to grow," Koopman says.

Here are four sales or service factors independent agents should focus on to improve their personal auto insurance book this year:

1) Digital technology. “We see the best growth opportunities for independent agents in smart, targeted and deeply digital marketing efforts that speak to a specific customer," says Brook McGuire, product strategy lead, Safeco Insurance.

“The most common deciding factor for millennials when purchasing insurance is getting the most comprehensive coverage for a good price," McGuire says. “Only 31% of millennial consumers say they want the lowest price even if that means getting a basic policy."

Agents are well positioned to succeed if they take the time to engage using digital tools to interact.

“Customers increasingly want to manage their lives on their mobile devices, and agents need to be sure they are ready to meet customers with flexibility," Koopman says. “By collaborating with the right carriers, independent agents can leverage the carriers' mobile capabilities to improve the digital sales and service they offer customers," she explains.

“We see time and time again that customers value the trusted advice of insurance professionals to help educate them on their specific coverage needs," says Lindsey Haley, vice president product management, State Auto.

This interaction between clients and agents is different from that of the past, however. “They want that same digital experience and ease that they get today through other financial services," Haley says. “As agents meet this demand of customers' expectations around how they interact and also offer professional insurance advice, they provide an unmatched value in the marketplace."

2) Telematics and usage-based insurance. Nearly 60% of agents are not fully comfortable with offering telematics, yet consumers are consistently asking for more control over their rates, according to Safeco's agent insights survey.

“Telematics and usage-based insurance are here to stay, and offering them right now, while people are driving less and are less likely to be driving late, means customers can capture meaningful savings that make it difficult for agents to pull those policies away," McGuire says.

Most recently General Motors announced the launch of their new insurance agency, OnStar Insurance Services. “We are encouraged by this enhancement in the industry—a telematics-forward platform—since we believe that telematics achieves the most accurate rate for risk in the personal auto market," Haley says.

Usage-based insurance creates opportunities for agencies in both new business production and customer retention. “As customers look for ways to reduce their premiums, many are now seeing the benefits of a usage-based insurance product," says Terry McClaskey, national personal lines leader, Westfield.

3) Emerging automotive trends. “A few emerging trends have the potential to disrupt or alter the state of the market," says David Clark, claims manager, Selective Insurance. From autonomous vehicles to the electrification of vehicles, agents have the opportunity to educate themselves and their clients on the impact of these emerging trends.

“It's important for agents to understand and communicate to clients that autonomous vehicles, connected vehicles and electric vehicles can be costly to repair and costly to insure," Clark says. And while safety features such as “advanced driver assistance systems may help reduce accidents, the cost of repair is higher and thus, premiums can be higher for a vehicle that is deemed safer."

4) Your existing book. “Prior to COVID-19, driverless vehicles was perhaps the largest emerging opportunity in the marketplace," Haley says. “Post COVID-19, the emerging risk is the unpredictable nature of driving patterns."

“We continue to encourage our agents to have policyholders adopt telematics as the way to mend this short-term pricing situation to best identify the right rate for risk," Haley continues.

In growing the book of business, one of the best prospecting opportunities is agents cross-selling their existing books.

“Most agencies average fewer than 1.5 policies per account, which means there are a lot of homes, autos and specialty vehicles insured by a competing agency or an 800-number carrier," McGuire says. “We recommend a concentrated effort at performing annual risk reviews to round out accounts, ask for referrals and continue building on the relationship."

Additionally, establishing a formal referral program that includes recognition for the referrer creates significant opportunities for agents. “While some states limit offering a nominal gift card, agencies can always make a donation to a local charity in their customers' names," McGuire says.

McGuire also recommends asking for a very specific referral. For example, it's easier to answer “Who do you know who just bought a new vehicle?" than “Give me the names of five people you know."

While growth in the personal auto market will be pressured in the near term, there is still tremendous opportunity for carriers and agencies to grow. Key factors for both carriers and agents will be providing customers with a great experience and engaging customers when, where, and how they want, Koopman says. 

Olivia Overman is IA content editor.