Digital embedded auto insurance helps dealers navigate economic volatility

  • InsurTech
  • Insurance expertise
a smiling couple sitting in a car with a salesman talking to them at the window

Auto dealers are facing an uphill battle when it comes to getting customers in the door. Vehicle prices continue to climb due to inflation; inventory delays have brought ground operations to a halt and caused customer service disruptions; the evolving and expanding e-commerce climate has prompted significant strategy adjustments. Compound these and other challenges with fears of a recession and increasing insurance prices, and the task seems near impossible.

To navigate this volatility and build their business, it is imperative dealers address consumers’ cost fears and preferences for speedy, digital and personalized service head-on while simultaneously seeking out new revenue streams. A key differentiator can be digitally embedded auto insurance, which can be a win for both dealers and their customers.

The benefits of embedded auto insurance

Embedded auto insurance allows dealerships to seamlessly integrate insurance solutions within their existing systems to provide a client with the opportunity to shop for and purchase insurance during the car-buying journey.

An embedded insurance brokerage, such as VIU by HUB, takes that a step further by offering these additional advantages:

  • Choice of carriers – Backed by Hub International, the number one personal lines broker in the U.S., VIU by HUB has access to more than 500 national and regional carriers. This large number of available carriers bolsters affordability and the company’s history translates to familiarity and trust.
  • Neutral expertise – Traditionally speaking, an insurance carrier has a fixed set of coverage options, while a broker is client-centric and agnostic to the product. With insurance brokers, a tailored, impartial experience is created for the customer based on their specific needs.
  • Expert advice across a lifetime – The VIU by HUB Advisory Team keeps customers’ evolving needs top of mind and offers expert coverage advice to help keep them protected, no matter what happens today or tomorrow. Combining signature renewal experiences, with tools like an insurance digital wallet, gives customers a trusted insurance solution that goes beyond their initial transaction
  • Higher conversion rates – Identifying and securing the right business partnerships can drive significant customer satisfaction and engagement, leading to an increase in an organization’s customer conversion rates and loyalty.

Stronger and better adjacent revenue results – Serving customers across a lifetime and across segments/geographies ultimately delivers dealers a new growth channel.

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Untapped opportunity to stand apart

Integrating technology and automation into the customer’s buying journey is now a need-to-have for staying viable. This is particularly true for younger customers who will begin – and possibly complete most of – their buying journey online before setting foot on a lot. Indeed, many people want both their insurance and car buying handled online.

However, a recent survey commissioned by VIU by HUB, found that when it comes to insurance, only 18% of survey respondents in the real estate and auto dealer industries offer embedded auto insurance as a value-add service. Because most businesses don’t offer customers the opportunity to purchase insurance at the point of sale – at least not yet – a dealer’s ability to do so sets it apart and demonstrates its value proposition.

Solutions beyond insurance

While offering the opportunity to obtain insurance at the time of purchase is a unique way to drive revenue and customer loyalty, dealers must think broadly about their entire business to truly move forward in today’s volatile environment. Three additional solutions to consider include: 

Focusing on digital

The digital retail landscape continues to evolve and provide easy, customized experiences that meet customers where they are at – from apps to online to in-store touchpoints. This helps dealers make their sales processes more efficient and effective.

Getting ahead of electric

The EV landscape in the U.S. is on the cusp of big growth, powered by a combination of consumer demand, policy initiatives and manufacturer investments. Dealers who do not invest in training for their business now will likely find themselves falling behind when it comes to answering customers’ EV questions.

Harnessing and protecting data

Major shifts in the availability of third-party consumer data are being seen, specifically in the wake of Google shuttering access to Universal Analytics. Dealers have a plethora of first-party data, and they must learn how to use it to market effectively. These changes will subsequently make data protection even more vital.

Looking to the future

After years of tight vehicle inventories, demand for new cars is expected to be modestly higher in 2023. That doesn’t negate other challenges, like affordability and broader recessionary concerns. There is a very tangible and monetary benefit for dealers who integrate the right insurance partner into their business model and make strategic investments in digital, EV and data strategies. The payoff clearly benefits customers too, with a seamless experience that makes a necessary transaction convenient. There’s no better time than now to drive results through partnerships - like one with VIU by HUB.