Embedded auto insurance, offered or automatically included in the buying process, could provide an opportunity for insurers to become more closely integrated with the digital platforms where customers already are, not just where insurers traditionally sell policies.
According to new research from Polly, an embedded insurance marketplace for automotive dealerships, these types of embedded insurance offerings are becoming a significant point of engagement in the vehicle-purchasing process.
"The data keeps telling us the same thing: insurance engagement is one of the few levers dealers can pull that consistently improves deal outcomes without adding friction to the deal," said Polly's vice president of automotive, Chris Pres. "Whether rates are rising or falling, dealerships that make insurance quoting a standard part of the desk process are seeing the strongest, most predictable results."
This boost in sales adds an average of $322 per transaction when compared to deals without insurance engagement. Polly also finds that this increases further when customers follow through with purchasing a policy after an embedded option is introduced: when customers purchased insurance, the transactions resulted in a 32% increase in F&I gross — an average of $523 more per transaction.
Mike Commo, Polly's chief product officer, said that AI-powered embedded insurance further enables this: "This is a relationship business. Dealerships survive on customer service and care, not just the sale itself. That's the whole reason a customer comes back, refers a friend, or buys their next car from the same store. AI doesn't threaten that. It hands the salesperson back the hour that used to disappear into insurance shopping, so they can spend it on the person in front of them."
Polly also notes that introducing insurance doesn't actually add time to finalize a deal: just 13% of quoted deals took more than a week to close, versus 16% of deals without insurance quotes. The median close time is three to four days, according to Polly's research, whether or not the customer received an insurance quote.
"Dealership customers used to spend an hour or more hunting for insurance that worked for them, often ending up with a bad quote anyway. We can now predict, in real time and with a high degree of accuracy, which carrier is the best fit at a competitive price for that customer, right in the dealership," said Commo. "That's a big part of why our latest report found that insurance adds zero time to the deal instead of slowing it down, and why dealers that engage with us are seeing F&I gains to the tune of 32%, or $523 more per transaction when customers buy insurance in the store. When the match is right immediately, everyone benefits: the customer has a great experience, and the dealer sees it in their numbers."
