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The fragmented auto insurance customer experience is set for disruption, according to a new report by Deloitte.

The report, “Reinventing the insurance customer experience for loyalty,” highlights how collaboration among original equipment manufacturers (OEMs), insurers and captives can drive the future of auto insurance while attracting and retaining customers.

OEMs and auto insurers share a similar woe. Customer loyalty for OEMs reached an eight-year low in 2023, while insurers face churn in the wake of rising auto premiums and changing needs.

Citing a Deloitte reported that 49 percent of auto insurance consumers actively shopped for a new policy in the past year, likely fueled by auto insurance premium increases that averaged 26 percent between 2023 to 2024.

Declining claims experience is another factor adding to the rise in auto insurance shopping.

Providing a seamless insurance journey for customers requires OEMs and their captives to create a mutually beneficial relationship with insurers and customers to build loyalty, boost profitability and define the future to secure a competitive advantage, the report stated.

With electric and automated vehicles set to take over roads soon, there is no better time to disrupt the current process for obtaining auto insurance.

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The potential onset of autonomous driving regulation could shift liability away from the driver to OEMs, captives and system partners (e.g., software companies).

“To prepare, companies should understand these emerging developments and risks and act on the associated insurance needs. Joining the mobility-insurance value chain now could give OEMs, captives, and carriers a chance to dictate how change happens and secure market share and competitive advantage,” the report’s authors stated.

Other factors disrupting the customer experience include new competitors, data ethics and consumer trust.

Customers want a seamless experience and a one-stop shop to address their needs and save time. Deloitte found that “1 in 3 U.S. consumers are interested in purchasing ’embedded’ insurance directly from the manufacturer, citing cost, convenience, and streamlined purchasing as primary benefits, with even greater interest globally.”

In addition, 60 percent of U.S. consumers want connected vehicle features such as maintenance updates and vehicle health reporting, with similar levels of interest in safer routing, collision prevention and maintenance forecasts based on driving habits.

“OEMs, captives, dealers and carriers should consider integrating personalized insurance offerings into a set of streamlined purchase, leasing, and repair processes that incentivize customers to stay within the brand,” the authors added. “Collaboration could allow insurers, OEMs, and captives to banish pain points and invent new, desirable outcomes for customers鈥攅ffectively building a one-stop shop through undeniable convenience.”

A process that is ripe for change, an already shared experience among stakeholders and a desire to stay connected with the customer throughout a vehicle life cycle are just some of the reasons to focus on insurance as the catalyst for change and improved customer experience.

What Deloitte dubs “the walled garden” is a way to stay connected with the customer from start to finish.

“To recapture loyalty and stay competitive, OEMs should seek to create a cradle-to-grave loyalty experience with each car鈥攁 walled garden of helpful services and interactions that span multiple customer and asset life cycles to keep people within the brand ecosystem,” the report stated.

The payoff equates to increased customer lifetime value and profitability.

(Editor’s Note: McKinsey consultants put forth similar views in a report last year. See related article, ““)

Research by Deloitte indicates that managing a vehicle asset across multiple life cycles can be 1.4 to 1.6 times more profitable than the traditional one-time sales model.

The points where there is opportunity are in the usage-related and vehicle-related services area between purchase and the end of use.

Customers want flexible, subscription-based options that can reduce costs while providing lifetime maintenance and accident management.

The report provides a to-do list for carriers that want to move forward.

“Carriers would need to invest in their tech stacks, data infrastructure, and operating models to effectively work with OEMs, becoming “partnership-fit” and leveraging large volumes of OEM data to personalize products, proactively understand risk, and move toward prevention from “detect and repair.”

In addition, Deloitte identified four possible archetypes of the future. These include:

• Broker – OEM broker routing car owners to certain designated insurers.
• Product Partnership – OEM brand-oriented insurance product.
• MGA – New or existing MGA that has direct product partnership with certain designated insurers.
• OEM/Captive Insurer -New insurance carrier that is a subsidiary of the OEM underwrites policies.

Current partnerships already exist, including Rivian and Nationwide 潘金莲传媒映画, Toyota 潘金莲传媒映画 Management Solutions and Toggle, a member of Farmers 潘金莲传媒映画 Group and GM 潘金莲传媒映画 Services, with policies underwritten and issued by GM National 潘金莲传媒映画 Company, which is fully owned by General Motor.

Ignoring the changing landscape of auto insurance could leave insurers out in the cold, replaced by new entrants into the marketplace, forward-thinking competitors and regulators.

Topics Trends Carriers Profit Loss Auto