Honda Launches Its New Insurance Division, Expanding Financial and Insurance Services for Dealers
In a significant move, American Honda Motor Co. has launched a new insurance subsidiary, Honda Insurance Solutions, offering a variety of insurance products directly to customers at the point of sale. This innovation is poised to boost F&I (Finance & Insurance) profits and contribute to long-term customer retention for dealers.
By embedding insurance sales within the OEM-branded offering, dealers can streamline the purchase process, making it more convenient for buyers to bundle financing, insurance, and the vehicle purchase. This traditionally represents a high-profit area for dealerships.
Honda Insurance Solutions, operating in all 50 states, is a licensed insurance agency providing options for autos, motorcycles, RVs, homes, and more. The company aims to deepen relationships with customers by offering integrated insurance solutions at the point of vehicle sale.
American Honda Motor Co. has partnered with VIU by HUB, an established brokerage, to facilitate the insurance sales. This partnership allows Honda Insurance Solutions to leverage agents and relationships with multiple insurance carriers.
The decision to offer insurance through a Honda company is seen as a wise one due to its potential to earn customer loyalty. By integrating insurance and potentially other services directly with the brand ecosystem, customers are encouraged to return to the dealer for ongoing service, renewals, and claims support.
Initial feedback from dealers, such as the Rick Case Automotive Group, which has Honda and Acura dealerships, has been enthusiastic. According to industry reports, when a customer purchases insurance as part of the vehicle buying process, F&I gross rises by 28%. Furthermore, a customer insured by Honda's agency is more likely to remain a Honda customer in the future.
Honda Insurance Solutions plans to gather feedback from dealers about what works for them before expanding the embedded insurance. The company also has a vision to embed buying insurance into a digital purchase process, with the Acura ZDX digital purchase platform being the initial launchpad for the insurance option for Honda vehicles.
In the future, Honda plans to offer insurance bundles that could save customers money on various types of insurance. The company also aims to extend the online purchase option to other Acura models and "one day" to Honda models.
This move aligns with broader dealer strategies emphasizing customer experience and loyalty to drive sustained profitability, including in fixed operations. By capturing a greater share of insurance-related revenue and deepening relationships through integrated insurance solutions offered at the point of vehicle sale, Honda Insurance Solutions is set to play a crucial role in the future of dealership operations.
References: 1. Honda Insurance Solutions 2. Polly's Q1 2025 Embedded Auto Insurance Report 3. American Honda Motor Co. to Launch Insurance Subsidiary 4. Honda to Offer Insurance Through a Honda Company 5. Honda Insurance Solutions: Boosting F&I Profits and Customer Retention
- The introduction of Honda Insurance Solutions could revolutionize transportation and automotive industries, as it aims to merge insurance with vehicle sales, potentially contributing to long-term business relationships and increased F&I profits.
- In an effort to streamline the purchasing process, Honda Insurance Solutions partners with VIU by HUB, leveraging their network of agents and relationships with various insurance carriers in the finance sector.
- To expand its reach and better serve customers, Honda Insurance Solutions plans to digitize the insurance purchasing process, integrating the option within the Acura ZDX digital purchase platform and aiming to eventually offer insurance bundles for various types of insurance, including for homes and RVs, as part of its technology-driven strategy.
