insurance study part 1: methodology the changing path to...

1 | Rocket Fuel Insurance Study, Part 1

Insurance Study Part 1: The Changing Path to Purchase Today, consumers—especially Millennials—increasingly prefer self-

directed approaches over traditional ones when engaging with insurance

carriers throughout the auto insurance path to purchase. Regardless of

which purchase stage these consumers are in, our research shows a shift

in preference from traditional engagement channels, such as personal

recommendations and in-person meetings at insurance agencies, to

digital ones, such as online advertising and insurance websites.

In this report, we’ll also explore the relationship between life stages and

preferred insurance providers. Whether it’s the influence of parents on

their children or individuals reaching retirement age, there are numerous

moments that are predictive of insurance shopping behavior that can be

used by a digital marketing platform to identify prospects likely to be in-

market for new auto insurance providers. Savvy insurance marketers will

use digital marketing solutions to poach these valuable consumers away

from the competition and preemptively attempt to retain their own at-risk

customers with engagement offers.

MethodologyRocket Fuel surveyed 1,020 consumers

in June 2015. Respondents were asked a

series of questions about auto insurance

ranging from their top-of-mind awareness

to life stage questions. In this report,

we focus primarily on exploring our

respondents path to purchase, and how

using life stage data has the potential to

increase the effectiveness of reaching

new consumers in their path to purchase.

Highlights ■ Consumers who have become

aware of their eventual auto

insurance provider through TV or

digital ads increased by 50%, over

the last year

■ One in four consumers requests

a quote directly on the insurer’s

website, up 9% from 2014

■ A child who has reached driving

age is the top life event and most

effective predictor for a consumer’s

likelihood to change auto insurers


2%

6%

4%

19%

12%

7%

17%

18%

18%

17%

34%

2%

6%

6%

8%

10%

10%

15%

18%

20%

24%

27%

Blogs or forums

An o�er in the mail

Social network

Not sure/don't remember

Consumer reviews online

Advertisement online

None of the above

Product or price comparison websites

Information on insurer's website

Search engine

Friends, parents, or colleagues

2015

2014

0%

1%

2%

1%

4%

3%

2%

13%

4%

21%

16%

33%

1%

2%

2%

2%

6%

6%

7%

9%

9%

13%

20%

23%

Blogs and forums

Newsletter

Consumer reviews on the internet

Social network

Saw/heard an ad elsewhere



Other

Search engine


Advertisement on TV

Recommendation from a friend,parent or colleague

2015

2014

2015

2014

Path to Purchase: AwarenessInsurance Study Results 2014-2015

Path to Purchase: ResearchInsurance Study Results 2014-2015

Path to Purchase: Auto InsuranceTraditionally, and as we’ve seen over the past two

years of our study, friends, parents, and colleagues

are considered among the most influential sources

of awareness for new auto insurance providers. This

is still the case, but our survey results over the past

two years show an interesting trend: Nearly one in

four consumers (23%) said they first became aware

of their current auto insurance provider because of a

recommendation from a friend, parent, or colleague.

This number is down 10% from last year’s results.

Similarly, the percentage of consumers first becoming

aware of their eventual auto insurance provider

through ads, either on TV or digital, increased by 50%

from one year ago.

We also noticed an increase in the number of

consumers who became aware of their current insurer

based on their website, most likely through search

channels. Ostensibly, this means that there is now

more opportunity for marketers to influence consumers

via digital channels— which, as we’ll see, ultimately

leads to more awareness and activation throughout the

purchase funnel.

After the initial awareness moment, consumers

considering a new auto insurance provider typically

move on to conducting research, and will most

likely research the providers of which they are

already aware. Here, depth of the research can

vary, being as simple as consulting with a friend,

parent, or colleague (27%), though this habit also

appears to be losing popularity—down from over a

third of respondents (34%) a year ago. In its place,

digital research habits have increased, with one

in four consumers (24%) opting to research new

auto insurance providers through a digital source.

Regarding digital engagement, search activity is up

from the previous year, with nearly two-thirds (62%)

leveraging digital channels for conducting their

research. Among these, reliance on search (24%),

insurer websites (20%), and online advertising (10%)

all increased compared to one year ago.

Soucre: Rocket Fuel internal



2%

6%

4%

15%

19%

36%

17%

4%

4%

4%

12%

24%

24%

26%

By calling a number on a 3rd party aggregator website

Other, free form

By submitting a form on a 3rd party aggregator website

I did not request a quote prior to purchase

By calling a number on the insurer's website

By meeting in-person with a local insurance agent

By submitting a form on the insurer's website

2015

2014

Requesting a quote has also changed. One in four (26%)

consumers now request a quote directly on the insurer’s website,

up 9% from 2014. As a consequence, the percentage of consumers

opting to meet with an agent in person to request a quote dropped

by 12%, down 24% compared to 2014. Across the board, consumers

are heavily influenced through digital mediums and look to them

more and more for their research needs and quote requests.

While applying for insurance online has not yet become more

common than in-person applications, this too may be changing.

One in three consumers in the study (32%) are now applying for

auto insurance online, up 9% from 2014.

It’s evident that consumers increasingly prefer digital channels

to research and apply for insurance products. As such, auto

insurers need to be looking for ways to deliver a consistent and

personalized customer experience across paid media such as

search and display, as well as owned media such as landing

pages and chat. Additionally, if auto insurers are also able to

leverage their first-party data to optimize media buys across the

entire funnel, they could more efficiently drive new customer

acquisitions and, in turn, add serious value.

32%

23%

45%

31%

32%

37%

Over the phone

Online

In-person at an agency

2015

2014

Path to Purchase: ApplyInsurance Study Results 2014-2015

Path to Purchase: Request QuoteInsurance Study Results 2014-2015




Path to Purchase: Millennials

1%

0%

1%

2%

3%

3%

2%

6%

7%

28%

19%

27%

0%

1%

2%

3%

3%

4%

4%

6%

9%

13%

21%

32%

Newsletter

Blogs and forums

Saw/heard an ad elsewhere

Consumer reviews on the internet

Social network



Other

Search engine


Advertisement on TV

Recommendation from a friend,parent, or colleague

2015 Millennials (18-34)


2015

2014

Millennials Path to Purchase: AwarenessInsurance Study Results 2014-2015

Part of driving new customer acquisition is understanding who your new customers are

and their path to purchase. At first glance, we see that one in three (32%) Millennials

first became aware of their current auto insurer based on a recommendation from a

friend, parent, or colleague. While this seems to suggest that Millennials might be more

conservative in the way they shop for auto insurance, the more likely reason for the

increased reliance on familial recommendations is a lack of confidence and experience

shopping for an insurance provider.

There is a high degree of correspondence between a parent’s auto insurer and who their

children ultimately choose. Nearly half (45%) of all State Farm consumers have the same

auto insurance provider as their parents,10% more than the closest competitor, Allstate.

Additionally, almost a third (31%) of consumers, Millennial or otherwise, have been with their

current auto insurance provider for ten or more years. So, not only are consumers most likely

to choose the same insurer as their parents when making an initial purchase, but it is also

rare for a consumer to switch providers, making it difficult to break the familial cycle.

Does this mean that it’s impossible for auto insurers to reach and convert Millennials? We

believe that the answer is “no.” But to do so, auto insurers seeking to reach Millennials

must consider these challenges and the roles they play in the Millennial purchase cycle.

In many cases, marketing to key influencers around Millennials (e.g. parents, colleagues)

may provide significant (although more difficult to measure) ROI for Millennial-focused auto

insurance advertising.



9%

7%

8%

12%

17%

14%

9%

17%

17%

35%

40%

3%

7%

8%

9%

9%

9%

10%

15%

21%

27%

35%

Blogs or forums

An o�er in the mail

None of the above

Social network

Consumer reviews online



Search engine

Product or price comparison websites

Information on insurer’s website

Friends, parents, or colleagues



2015

2014

3%

7%

3%

20%

21%

22%

23%

3%

3%

3%

15%

22%

26%

27%

Called a number on a 3rd party aggregator website

Submitted form on 3rd party aggregator website

Other, free form

I did not request a quote prior to purchase

Met in-person with a local insurance agent

Called a number on the insurer's website

Submitted a form on the insurer's website



2015

2014

33%

35%

33%

32%

35%

32%

Online

Over the phone

In-person at an agency



2015

2014

Millennial Online Activity and ResearchIt appears that Millennials are becoming savvier in

their research methods, as they are turning less to

friends, family, and colleagues in favor of a more

direct approach. Looking at our Millennial survey

respondents, we see that friends, parents, and

colleagues remain a large part of the research

process, with one in three Millennials (35%) looking

to these sources for research, though this was less

common compared to a year ago (40% in 2014).

One in five Millennials (21%) head directly to price-

comparison websites for research, up 4% from our

2014 survey. Compared to 2014, Millennials were

much less likely to turn to search as a method for

researching auto insurers, down 8% from 2014 to

27% this year.

Respondents in our study were segmented into two

groups: Millennials (Ages 18-34) and Non-Millennials

(Ages 35+). We were able to examine the sites

visited by each and study how differences in the

groups might reveal differences in the ways that

each group researched insurance providers and

might be influenced during the research process.

Overall, Millennials in our sample were 28% more

likely to visit a comparison-shopping site, such as

BankRate.com, than Non-Millennials, underlining the

generational differences in how consumers conduct

research before making an auto insurance purchase.

This change in research methods is particularly

evident when we look at how Millennials request a

quote. Nearly one in three Millennials (27%) request

a quote by submitting a form on the insurer’s

website—up 4% from our results one year ago.

Millennials’ application process is similar to that

of the general population, with about a third of

Millennials applying through each of the three most

common application routes.

Millennials Path to Purchase: ResearchInsurance Study Results 2014-2015

Millennials Path to Purchase: QuoteInsurance Study Results 2014-2015

Millennials Path to Purchase: ApplyInsurance Study Results 2014-2015





Allstate State Farm Geico Progresive USAA Farmer’s Nationwide

Allstate

State Farm

Geico

Progressive

USAA

Farmer’s

C U R R E N T A U T O I N S U R A N C E

Nationwide

PA

RE

NT

S C

UR

RE

NT

AU

TO

IN

SU

RA

NC

E

2015

2014

34% 5% 8% 3% 6% 6% 6%

3% 45% 8% 6% 4% 16% 10%

3% 2% 30% 7% 2% 3% 3%

2% 2% 3% 18% 0% 0% 6%

3% 0% 1% 1% 33% 0% 0%

2% 1% 1% 1% 2% 19% 6%

4% 0% 3% 6% 2% 0% 19%

Breaking Familial Cycles in Auto Insurance

Consumer relationships with auto insurers tend to be long-standing (over one-third of

consumers polled (38%) had had their current auto insurer for ten or more years). As

such, it’s important to identify the moments where consumers are most likely to consider

changing providers, and market effectively within those moments. In our analysis, we

looked at a variety of major life events and how those events affected a consumer’s

likelihood to change auto insurance providers within the following six months. We also

looked at how we could predict if a consumer had just experienced or was about to

experience one of those events.

Auto Insurance CrosstabCurrent Auto Insurance vs, Parents’ Current Auto Insurer



-18.7%

-13.9%

-5.8%

-3.3%

3.2%

15.8%

23.2%

24.2%

33.7%

42.8%

60.8%

62%

103.7%

111.1%

113.3%

Was issued first US driver's license

Had a car accident

Had a child

Bought a new house

Divorced/separated from significant other

Moved/relocated

Graduated college

Started a new job

Married significant other

Received a promotion or raise

Bought a new car

Male

Retired

Graduated from high school

A child of yours became of driving ageSignificant features

Non-significant features

Using Major Life Events to Predict Consumers Switching Insurance Providers

11% of the consumers in our study indicated that they would either

“Definitely” or “Probably” be shopping for a new auto insurance

provider in the next six months, with 30% indicating that price was

the main reason they chose their current provider. The reasons for

their desire to change providers were less clear, though likely to

be correlated with a major life event. In our study, consumers were

asked to identify whether they had experienced any of a series of

life events in the past year so we could look at how those might have

affected (or predicted) their likelihood to change insurance providers.

In our study, having a child reach driving age was the most

effective predictor for a consumer’s likelihood to change auto

insurers in the next six months (+113%), followed closely by

retirement (+103%). A new-car purchase (+61%) and a promotion

(+43%) were also more likely to change insurers. Additionally,

men were generally significantly more likely to change providers

than women (+62%). This last factor falls in line with our observed

results, which show that 71% of insurance conversions recorded

by Rocket Fuel are for men.

Life events such as these, though strongly correlated with age,

are often difficult to identify with specific online data segments

that may only track the age of the consumer, HHI, or the age of

their children. Additionally, it may not include a consumer quickly

enough to reach them effectively before a decision is made. As

we’ve seen in prior years (and which continues to be the case),

insurance shoppers are likely to research options they are already

aware of. For this reason, in-market segment data based on online

research activity (such as sites visited) may help auto insurers

drive quotes, but might be less effective at driving consideration

or inclusion in a consumer’s research set.

To effectively identify consumers who are, or soon will be, in-

market for a new auto insurance provider, insurers should seek

a reliable way of predicting which consumers are most likely to

experience, or have experienced in the past six months, one of

these life events.

Two potential ways to accomplish this are:

1. Leverage existing customer data stored in a DMP to identify

which customers have experienced specific life events

recently, then build a model around those customers for

reaching consumers through a DSP.

2. Use existing data to predict the likelihood that a given online

consumer has experienced, or will experience, one of these

key life events each time that consumer is observed online.

Ultimately, the goal is to factor this information into the decision to

serve a consumer an auto insurance ad with the highest likelihood

of creating a positive response.

Likelihood of Switching Auto InsuranceInsurance Study, Q2 2015



ConclusionConsumers, especially Millennials, are gradually shifting

their paths to purchase from traditional channels to digital

channels. As consumers increasingly prefer more self-directed

approaches to buying insurance products, it will be up to

insurance marketers to use more data-driven digital solutions to

reach these prospective new customers at the right moments.

Those marketers that leverage these powerful new approaches

will reap the rewards of a growing customer base and new

policies written, while those that do not risk stagnating and

losing market share.

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