Here’s a word you might hear a lot in the insurance business: “bundling.” It doesn’t exactly roll off the tongue but it’s, regardless, used often to describe when a customer of a particular insurance company decides to give said company their business concerning multiple insurance policies instead of just one. Generally speaking, it means that someone with a homeowners policy also purchases their automobile (or life, or both, or even more additional options) policy through their initial insurer and creates, along with said insurer, a type of “package” that encapsulates every policy into one large multi-policy.
This may seem like a fairly dry topic to be broaching in a blog but, trust us, there’s a good reason for it: homeowners insurance customer satisfaction is at an exciting, newly high level with major thanks to this bundling trend.
According to Insurance Journal, “‘the increase in satisfaction with policy offerings is directly related to customer perceptions that insurers are doing a better job in offering the right coverage options at competitive prices when policies are bundled,’ said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates. ‘Bundled policies not only may provide a reduced premium for customers, but may also be advantageous to both parties, as it allows customers to interact with a single insurer, potentially streamlining both billing and payment.’”
The article goes on to state that, “not only does bundling increase satisfaction with homeowners insurance companies, but it also increases customers’ intent to renew their policy.” Apparently, only 28 percent of customers with just a home insurance policy at a company say that they “definitely will” renew said policy, while those who bundle two policies are at a 46 percent “definitely will” and those who bundle four or more reach 66 percent. In short, the fewer companies customers deal with, the more they like the company with whom they do work.
The overall satisfaction is actually determined on a scale of one to 1,000 and, in 2012, it has reached 785, according to J.D. Power and Associates. This is up from 769 in 2011. While not a huge leap on a thousand-point scale, it is substantial enough for insurance companies to know that they’ve found a winning formula in bundling. In fact, many major insurance companies have seen their individual ratings reach the mid-800s thanks to bundling availability and the discounts that it affords.
Bundling isn’t just popular because the insureds’ information for all policies are located in a single place. It’s also flourishing because of its ability to streamline payment. Virtually no one likes paying bills and it’s generally accepted that, the more bills someone has, the more stressful his or her life becomes. Bundling eliminates what could be several different monthly payment dates, creating one simple day and method of payment for all insurance costs. It’s still not free but the convenience certainly helps.
So, whether you work in the P&C industry or you’re actually in the market for a new policy, yourself, it’s clear that bundling is a considerable option on both ends of the spectrum.