What is Embedded Insurance?
Embedded auto insurance integrates insurance offerings into the vehicle purchase journey, enhancing the traditional F&I process.
It not only makes the buying process easier for customers but also provides advantages for dealerships, from boosting customer retention to additional revenue opportunities.
Let's explore embedded auto insurance a little deeper.
Understanding Embedded Auto Insurance
Embedded auto insurance is creating a shift in the automotive industry, by allowing car-buyers to shop and purchase insurance during the vehicle purchase process. Unlike the usual method where insurance is considered after the vehicle has been purchased, embedded auto insurance simplifies the auto-buying process by eliminating the need to seek out separate insurance agents or engage with additional parties.
Giving customers the ability to shop for potential savings on their insurance premium gives them more cash flow to upgrade their vehicle or purchase F&I products. This may boost metrics like Per Vehicle Retail (PVR) and Products Per Deal (PPD) and can also enhance customer satisfaction by streamlining the buying process. It's not just a transactional add-on; it's a strategic move towards a better customer experience.
The Types of Embedded Auto Insurance
There are two types of embedded auto insurance – comprehensive and automated.
The comprehensive embedded auto insurance model serves as a powerful platform for dealerships, seamlessly integrating technology and human interaction to provide a range of benefits. JM&A utilizes a comprehensive insurance model powered by our partners at Polly.
This flexibility allows customers to adjust coverage levels and view personalized quotes which can lead to higher conversion rates and savings within the buying process. Additionally, the comprehensive insurance approach can improve retention and customer satisfaction by granting dealerships more control over the customer experience, thus, providing dealerships with an advantage in a highly competitive marketplace.
Simply stated: Including a personal touch provides a personalized experience within the process that allows the dealership to provide a better overall experience for their customers.
The automated approach eliminates the personalization for customers shopping for insurance. Instead, dealers using this approach will provide the car buyers with insurance quotes through a series of automated spam-like text messages and emails that get pushed to the buyer after they have left the dealership.
However, this approach offers a few benefits. The insurance buying process can be seamless if the customer completes the application by following the standard prompts. Additionally, the automated method requires a standardized process that can provide a consistent experience for each customer.
Both embedded insurance approaches, comprehensive and automated, offer specific advantages and considerations to keep in mind.
Let’s compare them.
Comprehensive vs. Automated
Integration
Integrating comprehensive insurance into dealership operations can require more resources and time for training your staff compared to automated systems, which have minimal training requirements. However, having human agents that can provide timely assistance and personalized support for customers and dealership personnel can enhance the overall experience and usually provides long term success.
Personalized Engagement
The advantage of comprehensive insurance over automated insurance in terms of engagement is reflected in their higher capture rates, which indicate the number of customers who purchase insurance policies. Comprehensive insurance provides personalized interactions, which can lead to higher engagement levels. Automated systems, on the other hand, may struggle to maximize capture rates due to their overreliance on an automated technology only based approach.
The value of personalized engagement you get with the comprehensive insurance option cannot be overstated.
Customer Satisfaction
Comprehensive insurance offers customization and real-time resolutions to cater to customer preferences. Automated systems prioritize speed and efficiency but may lack the personal touch necessary to engage customers effectively. Embedded Comprehensive insurance models can drive higher PVR by leveraging sales team insights and providing personalized recommendations, while automated systems excel in streamlining processes.
The choice between comprehensive and automated car insurance depends on the dealership’s priorities between personalization and efficiency in their sales processes.
| Comprehensive | Automated | |
|---|---|---|
| Customer Experience | Human interaction to enhance customer experience | Spam-like text messages sent to customer |
| Training | Minimal | Minimal |
| F&I Involvement | Customer Facing | Non-customer facing |
Making the Right Choice for Your Dealership
When choosing an embedded auto insurance platform, you should consider a variety of factors. Your dealership's sales strategy, F&I process, and customer service philosophy can help you determine the best method for your store.
To make an informed decision, it is important to assess your sales strategy and choose the platform that integrates seamlessly with your current process. Additionally, an efficient F&I process can be enhanced when customers are notified of potential savings before finalizing their purchase.
Finally, if the “time spent in the dealership” is a frequent customer service complaint, then an embedded insurance method that allows customers to purchase coverage during the process may be your best choice.
Make sure you have the right partner. They should be capable of providing organizational and infrastructure support that enables your team to utilize the platform to achieve the sales, F&I, and customer service goals of your dealership. "The best embedded auto insurance providers have strong alliances with many leading insurance carriers, that can provide more quotes and potential cost savings for your customers."
Conclusion
It’s important to look at others within the industry who are finding success. For example, JM&A Group has partnered with Polly, a pioneer of embedded auto insurance that employs a comprehensive insurance approach in over 1,700 dealerships to provide personalized car insurance solutions to customers while purchasing their vehicle.
Polly aligns directly with JM&A Group’s philosophy of building trust by combining personalized customer service with effective technology utilization. Selecting the right embedded auto insurance model is important whether it is comprehensive or automated.
By aligning your selection with your vision for the customer experience and operational efficiency, you can unlock the full potential of embedded auto insurance.
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