Walmart has partnered with AutoInsurance.com to offer car insurance to its customers at “everyday low prices.”
The new arrangement provides an auto insurance comparison service through the AutoInsurance.com website from national insurance carriers that include Progressive, Esurance, Safeco, Travelers, and 21st Century.
Walmart said it will direct customers to the website through its own website and in stores but will not sell the insurance directly.
Walmart customers using AutoInsurance.com, which is operated by Fort Lee, N.J.-based licensed property/casualty insurance agency Tranzutary Insurance Solutions, will see multiple quotes from each of the carriers.
The offerings are currently available in only eight states — Arkansas, Louisiana, Mississippi, Missouri, Oklahoma, Pennsylvania, Tennessee, and Texas— but the companies said they have plans to expand nationwide and also add more carriers.
Daniel Eckert, senior vice president of services for Walmart U.S., says the retailer began looking into areas where it could bring its “everyday low prices” and where customers are looking to save money about two and a half years ago. The firm said its studies showed that auto insurance was one area where customers expressed frustration.
“Insurance is one of our consumers’ biggest monthly expenses and many feel they are overpaying for the insurance they have and don’t know if they are getting the best coverage and the coverage they need,” he says. “We thought we could bring something to life in both of these arenas.”
The Walmart deal follows the announcement earlier this week that online discount retailer Overstock.com is also starting to sell insurance on its website.
Prior to this launch, Walmart piloted a single insurance carrier option in stores in Georgia and South Carolina and an aggregator model with multiple carriers in Pennsylvania. Walmart also experimented with offering Esurance auto insurance discount cards to consumers at kiosks in Illinois.
“We wanted to get a sense of if we were hitting the mark with customers and find out what is the best approach,” says Eckert.
Eckert and Joshua Kazam, founder of AutoInsurance.com, say that both single carrier and aggregator pilots were successful. The annual savings reported by customers in Pennsylvania was $1,168 on average.
Kazam says AutoInsurance.com was already established and in the insurance business but the partnership with Walmart led to a rebuilding of AutoInsurance.com into a website where consumers can shop and compare.
“We really worked diligently to be able to take online shopping to a new level and directly integrated with carriers,” he says. “The website allows consumers to compare apples to apples and makes insurance coverage shopping very easy to understand.”
Walmart will receive monthly fees for marketing the service in its stores and will also promote it on its own website, according to Eckert. Customers can access the AutoInsurance.com site through Walmart.com.
Kazam says they wanted to make the experience for consumers as easy and unique as possible. The site is able to pre-populate information fields by accessing consumers’ existing policies and directly integrates with carriers to facilitate quoting.
AutoInsurance.com says it retains all of the customer information and does not distribute it to the carriers until a consumer goes through with policy purchasing and binding.
AutoInsurance.com agents are also available to provide advice or assist consumers through the buying process.
As of now, the two companies plan to only work with auto insurance and no other lines.
Eckert says the cost savings through this new partnership are compelling to Walmart’s large customer base.
“One of the things we were most struck by was the power of comparison. In our year-long [pilot] people saw savings of $1,100 a year – that’s a lot of money for customers,” he says. “The savings are real and the comparison model offers the best choice for customers.”
A recent global survey by Accenture found that many as two-thirds (67 percent) of insurance customers would consider purchasing insurance products from organizations other than insurers, including 23 percent who would consider buying from online service providers such as Google and Amazon.
Customers who switch auto insurance carriers due to poor service often end up sorry they did because they end up paying more with their new insurer, according to the latest J.D. Power 2014 U.S. Insurance Shopping Study.