New Insurance Division Launched by American Honda Expands Financing and Insurance Possibilities for Automobile Dealers
In a significant move, American Honda Motor Co. has launched its new insurance agency, Honda Insurance Solutions. This innovative venture is expected to enhance dealerships' finance and insurance (F&I) profits and long-term customer retention by offering integrated, branded insurance solutions.
The new agency allows dealers to provide competitive, streamlined insurance quotes backed by the trusted OEM brand. This integration into digital retail platforms aims to reduce friction during vehicle delivery, improving customer satisfaction scores. By deepening engagement throughout the ownership lifecycle and offering optional OEM parts coverage, Honda Insurance Solutions could potentially drive stronger customer loyalty.
Moreover, dealers stand to gain new revenue streams beyond traditional F&I profits, as they gain more control and transparency over the insurance process. The initiative aligns with broader industry trends, with OEMs increasingly offering insurance services directly. This positions dealerships to benefit from enhanced margins and stronger customer relationships in a stable automotive economic environment.
The Rick Case Automotive Group, which operates Honda and Acura dealerships, as well as a Honda powersports franchise, believes that the new insurance agency could benefit them in the long term for increased brand retention. Honda Insurance Solutions uses VIU by HUB as its insurance brokerage platform, an established brokerage with agents and relationships with multiple insurance carriers.
The Acura ZDX will be the first Honda Motor Co. Ltd. model available for online purchase in the U.S., and the insurance option will be introduced in the Acura ZDX digital purchase platform. American Honda plans to continue introducing online purchases to other Acura models and eventually to Honda models.
Honda and Acura dealers could potentially see an F&I lift from offering insurance during the purchase process. Honda Insurance Solutions will operate in all 50 states, although some states may have different regulations regarding dealer involvement in insurance. The insurance bundle offered by Honda could save customers money on not just auto but other types of insurance.
American Honda Motor Co. is taking a step-by-step approach to expanding embedded insurance, seeking feedback from dealers. Dealers will be consulted about the embedded insurance process, with research being conducted to determine what works best for them.
Polly, an embedded insurance marketplace, reports that dealerships offering embedded insurance quotes saw a 21% higher F&I gross, and when a customer actually purchased insurance as part of the vehicle buying process, F&I gross rose 28%. This underscores the potential benefits of Honda's new insurance agency for both dealers and customers.
American Honda has a "vision" to embed buying insurance into a digital purchase process, but it is not yet in existence. As the automotive industry continues to evolve, Honda Insurance Solutions could play a significant role in shaping the future of dealership profits and customer retention.
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- The new Honda Insurance Solutions, powered by the brokerage platform VIU by HUB, is expected to not only enhance dealership profits in finance and insurance (F&I) but also contribute to long-term customer retention. This is because the integrated, branded insurance solutions could potentially drive stronger customer loyalty.
- By offering optional OEM parts coverage, integrated digital retail platforms, and controlling more of the insurance process, Honda Insurance Solutions may provide dealerships with new revenue streams beyond traditional F&I profits, aligning with broader industry trends in finance, transportation, and business.
