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2013 U.S. Insurance Shopping Study Results

4/30/2013
The recently released J.D. Power and Associates 2013 U.S. Insurance Shopping Study,SM now in its seventh year, finds while the percentage of auto insurance shoppers has reached a 6-year low, the percentage of those shoppers who select a new insurer is at a 6-year high. Among the 23% of customers who shopped for auto insurance in the past 12 months, 45% ultimately switched insurers--the highest rate since the study first began measuring insurance customer retention in 2008.

According to the study, the proportion of insurance customers who shop has decreased from a high of 33% in 2011, while the switching rate among shoppers has steadily increased from a low of 33% in 2010.

"Unlike many other industries we measure, policy retention rates for personal auto insurance in the U.S. market average 90%," said Jeremy Bowler, senior director of the global insurance practice at J.D. Power and Associates. "With customer satisfaction generally high and climbing, this industry has witnessed fewer customers shopping, but those who are shopping are serious about switching insurers."

Insurance shoppers are very cost-sensitive, and their satisfaction is less influenced by how they purchase their policy--from a local agent, a call center or online--than by price.

"Insurance companies need to be creative in order to differentiate themselves in this very competitive market," said Bowler. "Providing customers the freedom to choose their preferred contact channel, providing and clearly communicating discount options, and a variety of coverage options are just a few ways insurers can appeal to shoppers."

Overall new-buyer satisfaction with the auto insurance shopping experience averages 828 for the third consecutive year, following a 3-year decrease from 858 in 2008.

The study finds that the importance of the insurer website in the new-buyer purchase experience has increased to 24% in 2013, up from 22% in 2012. The call center representative is less influential among customers selecting a new insurer in 2013 (20%), compared with 2012 (22%), while the local agent remains as influential as in previous years.

"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. If they're not able to get that from one insurer's website, they will quickly move to the next insurer's site."

Erie Insurance ranks highest among auto insurers in providing a satisfying purchase experience, with a score of 854. Erie Insurance performs particularly well in all three factors. Rounding out the five highest-ranked insurers are Ameriprise (846); Amica Mutual and Liberty Mutual in a tie (845 each); and State Farm (843).

Based on the 2013 U.S. Insurance Shopping Study, J.D. Power and Associates offers the following consumer tips:

  • Consult local insurance agents and visit various websites before making a final decision on auto insurance. In addition to considering price, examine customer satisfaction with an insurer's coverage and service, and with the claims process.
  • Look for other goods, services, and benefits that might be available through your insurer, such as defensive driving courses, life and homeowners insurance, and safe driver discounts, among others.
  • Don't commit to buying insurance from a phone solicitor. Research the company and compare its rates and reputation with other insurers before making a decision.
  • Consider combining auto insurance with other types of insurance (life, homeowner's, healthcare) for a better price. Bundling multiple policies typically results in steep discounts.

About the Study
The 2013 U.S. Insurance Shopping Study, fielded in January 2013, 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 12 months preceding the study, and includes more than 50,000 unique insurer evaluations. The study examines insurance shopping and purchase behavior and overall satisfaction among customers who recently purchased insurance.

Additional Research:

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