The new alliance between Quicken Loans and State Farm could bring significant rewards to both companies, according to a new report on the deal from J.D. Power.
Last week, the mortgage giant and the insurer announced a partnership that will allow State Farm agents to offer Rocket Mortgage loan products to their customers with conventional Fannie Mae or Freddie Mac financing, as well as jumbo loans and mortgages backed by the VA, the Federal Housing Administration or the Department of Agriculture.
“This partnership could be huge for State Farm, which has a smaller proportion of younger customers than many of their competitors,” J.D. Power wrote in the report. “Quicken Loans, for its part, performs at the top when it comes to customer satisfaction, so adding this digital gem to the State Farm portfolio of services is compelling for insurance customers. Also, Quicken Loans has a more centralized national distribution model, so this more local distribution channel could be powerful for the mortgage giant.”
The report said that the alliance is a “best of both worlds” situation for customers, combining the technology of Quicken’s Rocket Mortgage with the “high touch” of a State Farm agent.
“Customers increasingly prefer and rely on digital tools for servicing and transactions, but mortgage and insurance customers have struggled with these tools when it comes to handling more complex transactions,” the report said. “Quicken Loans’ Rocket Mortgage application, paired with the in-person guidance of a State Farm agent can be an optimal outcome for customers who want the streamlined process offered by Rocket Mortgage but with access to professional guidance.”
J.D. Power saw the alliance as a “particular boon” for first-time homebuyers, according to a report by BTSLife.net.
“Streamlining the digital and non-digital customer service ends is important for all customers, but can be a particular boon to younger, first-time buyers, who prefer digital but also want some handholding through the mortgage process since they have no prior experience and it’s the largest purchase they will ever make,” the J.D. Power report said. “The need for guidance among first-time buyers benefits State Farm with the opportunity to in essence ‘bundle’ a policy with that mortgage and capture a segment of customers with whom they currently have lower overall appeal.”