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Satisfaction with Auto Insurers Remains Strong

4/30/2013
Customer satisfaction with auto insurance companies is generally high and climbing, according to the latest J.D. Power and Associates auto insurance customer satisfaction research, which indicates that fewer customers are shopping for new auto insurers, but those who are shopping are serious about switching insurers.

In a study conducted last year, overall customer satisfaction with auto insurers in 2012 was at an all-time high (804 on a 1,000-point scale), according to the J.D. Power and Associates 2012 U.S. Auto Insurance Study.SM Yet, despite this high level of satisfaction, 23% of auto insurance customers shopped for a new insurance company during the past 12 months, according to the J.D. Power and Associates 2013 U.S. Insurance Shopping Study.SM

The 2013 Insurance Shopping Study examines insurance shopping and purchase behavior, as well as overall satisfaction, among customers who recently purchased auto insurance across three factors (in order of importance): price, distribution channel, and policy offerings. The 2013 study finds that the percentage of customers who shopped for auto insurance during the past 12 months (23%) has reached a 6-year low. However, among those who did shop, 45% ultimately switched insurers, which is the highest rate since 2008, when J.D. Power first began measuring insurance customer retention. The proportion of customers who do shop for a new policy has decreased from a high of 33% in 2011, while the switching rate among shoppers has steadily risen from a low of 33% in 2010.

Insurance shoppers tend to be cost-sensitive, and their satisfaction is less influenced by the channel they use to purchase their policy--e.g., from a local agent, a call center, or online--than it is by price.

To appeal to insurance shoppers, it's important to clearly communicate discount options and to explain the variety of coverage options, according to Jeremy Bowler, senior director of the global insurance practice at J.D. Power and Associates. "As more shoppers are buying their insurance online, it's vital that insurance companies provide a high-quality and effective Web experience, whether customers are accessing the site on a desktop computer, a tablet, or a smartphone," said Bowler. "Customers want a site that's easy to navigate, allows them to get a quote, and even complete the purchase without having to speak with an agent or call center representative," he added.

Insurance Shopping Customer Satisfaction Rankings
Erie Insurance, based in Erie, Pa., ranks highest among auto insurers in delivering a satisfying purchase experience, earning a score of 854 (on a 1,000-point scale) in the 2013 Insurance Shopping Study. The next highest-ranking insurers are Ameriprise (846); Amica Mutual and Liberty Mutual in a tie (845 each); and State Farm (843).

The 2013 study is based on responses from more than 16,900 shoppers who requested an auto insurance price quote from at least one competitive insurer in the past 12 months, and includes more than 50,000 unique insurer evaluations. The study was fielded in January 2013.

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