Honda's Novel Insurance Subsidiary Expands Financing and Insurance Prospects for Dealers
American Honda Motor Co. has taken a significant step forward in the automotive industry, launching Honda Insurance Solutions. This new insurance agency offers insurance options for autos, motorcycles, RVs, homes, and more, aiming to streamline the buying process and increase revenue for dealers [1][3][5].
The new insurance offering allows Honda and Acura dealers to sell insurance products directly through an OEM-branded agency, keeping more revenue in-house rather than outsourcing to third-party insurers. This embedded insurance model contrasts with the traditional approach, where customers often purchase insurance separately after choosing their vehicle [1][3].
By managing insurance sales internally, dealers can capture higher margins in F&I and have an additional “owned” touchpoint with customers beyond financing and warranty products [1][3]. This approach also supports long-term customer retention by promoting a more integrated ownership experience. Insurance is a key touchpoint in the vehicle ownership journey, and American Honda emphasizes tailoring coverage and customer experience through digital channels, which can increase customer satisfaction and loyalty [5].
Retaining customers after warranty expiration is a critical challenge dealers face, as customers tend to drift away at that point. Embedded insurance products combined with other F&I offerings can help maintain engagement and loyalty by bundling services and simplifying renewal and ownership management through the brand’s digital platform, addressing a key source of customer attrition [5].
According to Polly's Q1 2025 Embedded Auto Insurance Report, dealerships offering embedded insurance quotes saw 21% higher F&I gross. Moreover, when a customer purchases insurance as part of the vehicle buying process, F&I gross rises by 28%, according to Polly [6].
American Honda aims to offer insurance bundles that save customers money on auto and other types of insurance. Some less-regulated states may be targeted initially to figure out the best way to offer insurance [2]. The Acura ZDX digital purchase platform will be the first to offer Honda Motor Co. Ltd.'s insurance option [4].
Expansion of embedded insurance will be done step-by-step, with feedback from dealers. Dealers will be consulted to determine what works best for them in offering insurance. Insurance will be offered as an option during the online purchase process, along with accessories and subscriptions [1][3].
This approach aligns with a broader trend where OEMs like Honda, Ford, and GM offer branded insurance solutions to capture more value and deepen customer relationships [1][3]. Polly is an embedded insurance marketplace that allows a car buyer to compare different insurance offers before purchasing a policy [7].
In summary, American Honda’s embedded insurance offering:
- Increases F&I profits by internalizing insurance sales and adding a new, recurring revenue stream.
- Enhances long-term customer retention by integrating insurance as part of the digital vehicle ownership journey, keeping customers connected to the dealer and brand over time.
- Supports a superior, tailored customer experience that can reduce customer churn post-warranty [1][3][5].
By embracing this innovative approach, American Honda is set to redefine the automotive industry, offering a seamless and competitive vehicle purchasing experience that prioritizes customer satisfaction and loyalty.
[1] https://www.autonews.com/dealerships/honda-dealers-get-insurance-sales-boost-online-purchase-process [2] https://www.autonews.com/dealerships/honda-aims-insurance-bundles-save-customers-money [3] https://www.autonews.com/dealerships/honda-launches-insurance-agency-dealers [4] https://www.autonews.com/dealerships/acura-zdx-digital-purchase-platform-offer-honda-insurance-options [5] https://www.autonews.com/dealerships/honda-aims-insurance-bundles-save-customers-money [6] https://www.autonews.com/dealerships/honda-dealers-get-insurance-sales-boost-online-purchase-process [7] https://www.polly.com/
- By integrating an OEM-branded insurance agency, Honda and Acura dealers can sell insurance products directly, aiming to keep more revenue in-house and offer a more integrated ownership experience, contrasting the traditional approach where customers often purchase insurance separately.
- This embedded insurance model, supported by technology, allows American Honda to provide insurance bundles that could save customers money on multiple insurance types, increasing customer satisfaction and loyalty, and working towards redefining the automotive industry with a seamless and competitive vehicle purchasing experience.
