Auto Insurance Shopping Trends

Only one in four auto insurance customers shopped for a new policy in the past 12 months, but 43 percent of those that did switched their insurer – the highest rate since 2008 – according to the J.D. Power and Associates 2012 U.S. Insurance Shopping Study released earlier this week.

J.D. Power notes that the increase in the proportion of shoppers switching actually suggests that fewer customers are price shopping for a better rate, given that the auto insurance shopping rate is at its lowest point in the past five years.

This is perhaps a result of the lower typical savings that result from switching insurer, which has decreased from an average of $412 in 2010, to only $359 in the past 12 months, it said.

J.D. Power also notes that customer retention rates are increasing at a time when auto insurers are spending more money to entice customers to switch insurer:

“Auto insurers spent $5.7 billion on advertising and allowances in 2011, but this increased spend does not appear to have generated a commensurate increase in market churn.†

As far as online shopping trends, the study also finds that 52 percent of auto insurance customers start the shopping process online, and 73 percent visit at least one insurer’s website at some point during their shopping experience.

More significantly, 32 percent of customers solely obtain quotes online, and some 34 percent of all recent shoppers state they would most prefer to purchase their new policy online.

The 2012 U.S. Shopping study is based on responses from more than 16,100 shoppers who requested an auto insurance price quote from at least one competitive insurer in the past 12 months.

Check out  Insurance Information Institute (I.I.I.) tips on how to save money on auto insurance here.

In other auto insurance and blog-related news, we are happy to report that Terms + Conditions has been named  one of the Top 75 Auto Insurance Blogs  by  iAuto Insurance.org. We are honored.

Terrorism Risk Reminder

Against the backdrop of unrest  surrounding May Day demonstrations, the one-year anniversary of the death of Osama Bin Laden is a reminder of the potential for terrorism attacks.

A bulletin released by the FBI and Department of Homeland Security last week warned of possible terrorist attacks on the one-year anniversary of Osama Bin Laden’s death.

While U.S. authorities said there are no specific, credible threats, concerns remain about “lone wolf† terrorists viewing an attack on this anniversary as “a symbolic victory.†

This is a good time to remind ourselves of the importance of the terrorism risk insurance program – a public-private risk sharing partnership that since 2002 has allowed the federal government and the insurance industry to share losses in the event of a major terrorist attack.

Facts and statistics from the Insurance Information Institute (I.I.I.) reveal that the terrorist attack of September 11, 2001 remains the worst terrorist act in terms of fatalities (2,976, excluding the 19 hijackers) and insured property losses (about $23 billion in 2010 dollars).

Total  insured losses from 9/11, including property, life and liability losses amounted to about $40.1 billion in 2010 dollars.

9/11 losses were paid out across many different lines of insurance, as this I.I.I. chart indicates:

LOSS DISTRIBUTION BY TYPE OF INSURANCE FROM SEPTEMBER 11 TERRORIST ATTACK (1)
($ 2010 billions)

LOSS DISTRIBUTION BY TYPE OF INSURANCE FROM SEPTEMBER 11 TERRORIST ATTACK (1)

(1) Adjusted to 2010 dollars by the Insurance Information Institute using the U.S. Department of Labor BLS Calculator.

Source:Â   Insurance Information Institute.