Auto Insurance InsightsOpportunities in an evolving industry

MICROSOFT ADVERTISING

Microsoft Advertising. Intelligent connections.

Alan Zou, Analytical Lead

Australia’s steady automotive market

The Internetand the smart consumer

Generate urgency in the face of rising premiums

Optimize demographic targeting

Key trends and actions

Steady growth in motor vehicles

Average annual growth in registered motor vehicles nationally from 18.8m in 2017 to 19.5m in 2019

Source: ABS, Motor Vehicle Census 2017, 2018, 2019

1.8%

Source: Cars Guide Link: https://www.carsguide.com.au/car-advice/australian-car-market-car-sales-statistics-and-figures-70982

• New cars demonstrate steady growth over last 10 years

• Australia is 7th highest country cars per capita (775 motor vehicles per 1000 people)

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Yearly new car sales in Australia

Cars Sold (m) Linear (Cars Sold (m))

Australia boasts high market penetration

Source: IBISWORLD. Car insurance in Australia 2019

The Internet is empowering consumersIncreased accessibility to the internet and presence of online aggregators provide consumers:

- Larger pool of options- Better price visibility- More informed decisions

Source: Bain & Company, Customers know what they want. IBISWorld, Car Insurance in Australia 2019.

Consumers today want simple, easy to use, readily accessible experiences.

A steady industry reduction in:- physical locations- employment numbers indicates that insurers are cutting physical costs to focus on their online presence.

6500

6600

6700

6800

6900

7000

7100

7200

400

450

500

550

600

650

700

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Industry physical locations and employment numbers

Location Employment

Auto insurance search is steadily moving online

Comprehensive Car

Insurance

(+comprehensive)

Auto insurance related

searches are growing YoY+11%

Car Insurance

(+car insurance)

+14%Comparison terms

(+compare/+comparison/

+best/+cheapest/+top)

+6%

Budget Cover

(+budget/+no

frills/+basic)

+13%

Source: Microsoft internal data, search volume, Jan 2018 – Oct 2018, Jan 2019 – Oct 2019, Australia, all devices.

Source: Microsoft Internal Data Jan 18 –Jan 19, Australia, all devices.

Computers, internet, and online aggregators provide:• Larger pool of options• More price visibility• Faster customer

service

Shifting consumer behavior promotes increased investments from operators in online experience, whi

0

50

100

150

Jan-18 Jul-18 Jan-19 Jul-19

Search volume Click volume

CY2018 CY2019

Jan 18 Searches

Action: Increase budgets to take advantage of an industry evolving within the online space

Online focus shown by +9.2% YOY click growth

Auto insurance currently discounted

Premiums have experienced slow growth, but pressures are rising

100

105

110

115

120

125

130

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Motor insurance premiums and wage price indices (WPI)

Wage Price Index Avg Premium Index

Source: Insurance Council of Australia & Australian Bureau of Statistics for WPI Sep YOY Trends

Steep premium growth over recent 5 years signals this will soon change.

Action: Generate urgency to your customer with the right ad copy!

Premiums have shown slow growth, but not for long!

Refine your audienceLeverage Microsoft Advertising’s demographic targeting to maximisespend

Source: Microsoft internal data, CY 2019 for Auto Insurance queries.

78.7%

21.3%

Auto Insurance Clicks (%) CY19

35+ 18-34

The 35-65 age groups comprise over three quarters (78.7%) of clicks in 2019.

Young drivers lean towards basic car insurance due to low income/vehicle value, and price discrimination.

Go Do’s:- Apply bid adjustments to increase ad exposure for age groups:

35-49, 50-64, 65+

- Bid boost no frills/budget policies to millennial age groups: 18-24, 25-34

Boost the right policies to the right age groups

Source: Microsoft internal data, CY 2019 for Auto Insurance queries.

Denser focus on NSW in auto insurance relative to finance verticals.

NSW, VIC, QLD and WA comprise over 90% of all click volume within auto insurance.

Go Do’s:- Apply appropriate bid adjustments to

increase ad exposure for NSW, VIC, QLD and WA.

35%

22%19%

10%13%

45%

21%18%

6%10%

New South Wales Victoria Queensland Western Australia Others

% of grand total clicks 2019

All Up Finance Auto Insurance

Take advantage of dense click volume in NSW

.

The auto insurance industry is evolving within the online and search landscape, creating ample opportunities for you to reach your consumers.

Create brand awareness and establish your presence with developed campaigns to capture and retain your consumers.

Age groups and corresponding behaviours are well-defined, auto insurance in general receives more attention from the older generation, whereas younger users display a focus towards cheaper policies.

Apply bid adjustments and age targeting to capitalize on these differences.

Auto insurance search volume is focused across some of the states, particularly in NSW

Apply geolocation targeting to focus your budget in states where clicks are denser.

Microsoft Advertising Auto Insurance cheat sheet

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