Property and Casualty Insurance - US - May 2009

Table of Contents

• Scope and Themes
• What you need to know
• Consumer survey data
• Online surveys
• Greenfield Online
• Experian Simmons National Consumer Studies
• Abbreviations and terms
• Abbreviations
• Terms
• Executive Summary
• Industry overview
• Current profitability of P&C insurers and the housing bubble
• Impact on Property & Casualty insurers
  • Figure 1: Financial results for property & casualty insurers, 2006-08
• Effects of 2008' s Hurricanes Ike and Gustav
• Consumers become Smart Shoppers
• Agents see their role as trusted advisor
• Competition for premium dollars has heated up
• Increases in ad expenditures and messages greet the new consumer
• Market Size and Forecast
• Key points
• Overview
  • Figure 2: Property and casualty insurance premium written by line, direct written premium, 2007
• Auto insurance direct written premium declined in 2007
  • Figure 3: Private passenger auto direct written premium at current and inflated prices, 1993-2007
• Auto insurance has become less expensive over time
  • Figure 4: Average auto insurance expenditure by state, 2006
• Homeowners insurance growth in DWP has slowed considerably
  • Figure 5: homeowners insurance direct written premium at current prices, 1993-2007
  • Figure 6: US median home price for existing single-family homes and homeowners insurance at inflated prices, 1999-2008
  • Figure 7: Average premiums homeowners and renters insurance, 2000-06
• Combined ratios of personal lines
  • Figure 8: Combined ratios for personal lines, 1993-2008
  • Figure 9: P&C industry combined ratio, 2001-08
• Marketing Channels
• Key points
• Direct writers vs. agents
  • Figure 10: Property & casualty insurance net written premium, by channel, 2007
• More consumers are turning to the internet
  • Figure 11: Online auto insurance activities, 2007-08
  • Figure 12: Online auto insurance activities, 2008
• Marketing channels -- consumer surveys
  • Figure 13: How auto insurance was purchased, by age, May 2008
  • Figure 14: How homeowners insurance was obtained, by age, September 2008
  • Figure 15: How homeowners insurance was obtained, by age, September 2008
  • Figure 16: How homeowners insurance was obtained, by income, September 2008
  • Figure 17: How homeowners insurance was obtained, September 2008
  • Figure 18: How homeowners insurance was obtained, by age and ethnicity, September 2008
• Marketing channels -- agent survey
  • Figure 19: Agent opinions on marketing channels, summary of top two boxes (agree, strongly agree), by gender and age, February 2009
  • Figure 20: Agent opinions on marketing channels, summary of top two boxes (agree, strongly agree), by agent longevity, February 2009
• Agent Survey -- Recruiting and Compensation
• Agents face many recruiting challenges
  • Figure 21: Agent opinions on obstacles to the recruiting and retention of insurance agents, summary of top two boxes (agree and strongly agree), by gender and age, February 2009
• Agents feel well-supported by their companies
  • Figure 22: Employment status (independent contractor, independent exclusive agent, or employee), by gender and age, February 2009
  • Figure 23: Percentage of business that is any type of property & casualty (P&C) insurance (personal and/or commercial lines), summary of means, by gender and age, February 2009
  • Figure 24: Company(s) agent represents for property & casualty (P&C) insurance products (personal and/or commercial lines), by gender and age, February 2009
  • Figure 25: Longevity of agents, by gender and age, February 2009
  • Figure 26: Attitudes about whether company(s) supports agents, by gender and age, February 2009
  • Figure 27: Types of incentives and support received, by gender and age, February 2009
  • Figure 28: Attitudes about compensation structure(s) when compared to other companies, by gender and age, February 2009
  • Figure 29: Satisfaction with compensation structure(s), by gender and age, February 2009
• Competition is a good thing
  • Figure 30: Agent opinions on impact of industry developments, summary of top two boxes, (very positive effect and positive effect), by gender and age, February 2009
  • Figure 31: Agent opinions on impact of industry developments, summary of top two boxes (positive effect and very positive effect), by agent longevity, February 2009
• Agents predict online marketing will be favorable for them
  • Figure 32: Agent opinions on impact of future industry developments, summary of top two boxes (positive effect and very positive effect), by gender and age, February 2009
  • Figure 33: Agent opinions on impact of industry developments, summary of top two boxes (positive effect and very positive effect), by agent longevity, February 2009
• Agents' thoughts on regulation
  • Figure 34: Agent opinions about state vs. federal regulation, summary of top two boxes (agree and strongly agree) by gender and age, February 2009
  • Figure 35: Agent opinions about state vs. federal regulation, summary of top two boxes (agree and strongly agree) by agent longevity, February 2009
• Market Drivers
• Key points
• The U.S. population is projected to grow through 2012 and beyond
  • Figure 36: U.S. population for adults, 18+, by age segment, 2002-12
  • Figure 37: U.S. population for adults, 18+, by age segment and owners of auto or homeowners insurance, 2002-12
• Housing sales are down
  • Figure 38: New private residential housing starts, 1994-2009
  • Figure 39: New private housing starts, March 2008-March 2009
  • Figure 40: Annual existing home sales, 1993-2008
  • Figure 41: Housing inventory and months supply, 1999-2008
• Foreclosure rates are escalating.
• Sales of autos and light trucks have also slowed considerably.
  • Figure 42: Annual auto and light truck sales, 1999-2009
• Some have figured out ways to reduce costs for auto insurance.
• There has been a spike in the number of catastrophes
  • Figure 43: US insured catastrophe losses, 1992-2008
• Leading Companies
• Key points
• GEICO, Farmers and Allstate made substantial gains
  • Figure 44: Private passenger auto insurance top writers, by direct written premium, 2007
• Leading homeowners insurers
  • Figure 45: Homeowners Insurance top writers, by direct written premium, 2007
• Brand Qualities
• Key points
• Brand differentiation is based on positioning
• Innovation and Innovators
• Key points
• Doing something green
• Mortgage protection plans
• Tracking teen drivers
• Advertising and Promotion
• Key points
• Overview
  • Figure 46: Total advertising expenditures of the P&C insurance industry, 1999-2007
• Television advertising
• State Farm Insurance
  • Figure 47: State Farm Auto Insurance television ad, Girl turns into young woman while waiting to see if she can borrow dad' s car, 2009
• Allstate Insurance
  • Figure 48: Allstate television ad, in a recession, 2009
• GEICO Insurance
  • Figure 49: GEICO television ad, small gecko is shown standing on a desk, 2008
  • Figure 50: GEICO television ad, stack of money with eyes; he' ll be here waiting, 2009
  • Figure 51: GEICO television ad, cavemen bikers see billboard at bar, 2008
• Viral videos
• Progressive Insurance
• Progressive
  • Figure 52: Progressive Auto Insurance television ad, wife doesn' t know about husband' s toys, 2008
  • Figure 53: Progressive Motorcycle Insurance television ad, more like a 900 V twin, 2009
• Hartford/AARP
  • Figure 54: Hartford Auto Insurance television ad, people accomplish activities in various autos, 2009
• Liberty Mutual
• Doing the right thing
  • Figure 55: Liberty Mutual television ad, man goes outside to see wrecked car, 2008
• Direct mail and print ads
• Competitors of State Farm in Florida
  • Figure 56: AAA direct mail ad, 2008
  • Figure 57: Poe Agency Direct mail ad, 2008
  • Figure 58: People' s Trust Insurance Company direct mail ad, 2008
• The price wars
  • Figure 59: Allstate print ad, 2008
  • Figure 60: Allstate direct mail ad, 2008
  • Figure 61: Countrywide Insurance direct mail ad, 2008
  • Figure 62: Nationwide Mutual Insurance Direct Mail Ad, 2008
  • Figure 63: GEICO print ad, 2009
• Mortgage Protection Plans
  • Figure 64: American Bankers Insurance Company of Florida direct mail ad, 2008
  • Figure 65: Balboa Insurance direct mail ad, 2008
• Going green
  • Figure 66: AAA direct mail ad 2007
  • Figure 67: Allstate direct mail ad 2007
• The Consumer -- Ownership and Company Market Share
• Incidence of property & casualty insurance ownership
  • Figure 68: Purchase incidence of property and casualty insurance, by age, September 2008
  • Figure 69: Purchase incidence of property and casualty insurance, by income, September 2008
  • Figure 70: Purchase incidence of property and casualty insurance, by race/ethnicity, September 2008
  • Figure 71: Purchase incidence of property and casualty insurance, by age, September 2008
  • Figure 72: Purchase incidence of property and casualty insurance, by income, September 2008
  • Figure 73: Purchase incidence of property and casualty insurance, by ethnicity, September 2008
  • Figure 74: Ownership of property and casualty insurance, by age and ethnicity, September 2008
• Market share for automotive insurance
  • Figure 75: Brand of automotive insurance owned, by age, September 2008
  • Figure 76: Brand of automotive insurance owned, by income, September 2008
• Allstate leads State Farm among Asians and Hispanics for auto
  • Figure 77: Brand of automotive insurance owned, race/ethnicity, September 2008
  • Figure 78: Brand of automotive insurance owned, by age and ethnicity, September 2008
• State Farm has a solid lead in homeowners insurance
  • Figure 79: Brand of homeowners insurance owned, by age, September 2008
  • Figure 80: Brand of homeowners insurance owned, by income, September 2008
• Preferences by race/ethnicity
  • Figure 81: Brand of homeowners insurance owned, race and ethnicity, September 2008
  • Figure 82: Brand of homeowners insurance, by age and ethnicity, September 2008
• Dollar value of policies
  • Figure 83: Average dollar value of homeowners and automotive insurance, September 2008
• Appendix: Trade Associations