WESTLAKE VILLAGE, Calif. —Auto Insurance rate increases have many customers shopping for a new insurer, but few are actually switching insurers, according to the J.D. Power 2015 U.S. Insurance Shopping StudySM released April 27.
Now in its ninth year, the study measures insurance shopping and purchase behavior, and purchase experience satisfaction among customers who recently purchased insurance across three factors (in order of importance): price, distribution channel and policy offerings.
Auto insurers increased rates by an average of 2.1% nationwide in 2014, following an increase of 2.5% in 2013. Those rate hikes are contributing to customers shopping for a better deal, and while more customers are shopping for a new insurer—39% in 2014 compared with 32% in 2013—fewer are actually switching. The 2015 study finds that among those who shopped, only 29% actually switched in 2014, compared with 37% in 2013.
“Customers are being pushed into the market due to rate increases, but unless they can find a policy that will save them money, they’re not switching providers,” said Valerie Monet, director of the insurance practice at J.D. Power. “In fact, many of those customers can’t find a better deal and ultimately don’t switch insurers.”
More than half (53%) of retained customers indicate they stayed with their incumbent insurer, up 10 percentage points from 2014, and that their insurer offered the lowest price. In comparison, just 29% of customers indicate they found a better deal and switched to a new insurer—down 12 percentage points from 2014.
“Customers who shop and do find a better deal will likely switch insurers, and increasing satisfaction scores among customers who recently switched suggests that those customers are pleased with the price they receive,” Monet said.
Satisfaction with the purchase experience among customers who recently switched insurers improves by 12 points year over year to 833 in 2015. A 13-point improvement in the price factor—the leading driver of customer satisfaction with the purchase experience—is the primary driver of higher overall satisfaction in 2015.
Shoppers who switched insurers indicate an average premium savings of $388 in 2015, compared with $340 in 2014 and $351 in 2013. Examining satisfaction scores from no savings up to $250 or greater, witheach $50 increase in savings, satisfaction with price increases by approximately 25 points, on average.
Monet notes that while price is the most tangible aspect of a policy for consumers to focus on during the shopping process, there are other factors that are critical to a positive experience.
“When looking exclusively at price, consumers may find the grass is not always greener,” Monet said. “Many customers are obtaining quotes and gathering information on insurer websites or through aggregators, but the day-to-day interactions they have with their insurer, especially if they have to file a claim, will be the ultimate moment of truth for the customer.”
J.D. Power advises consumers to look for insurers that provide clear, effective communication about policy options throughout the shopping experience—whether through interactions with staff or through tools and information on their website—including guidance in the selection of a policy that meets their needs, any discounts they may be eligible to receive and how their premium is calculated.
Next page: Key findings, customer satisfaction rankings
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