J.D. Power Reports on Auto Insurance Customer Satisfaction

Price is a key driver of satisfaction among auto insurance buyers, according to the J.D. Power 2014 U.S. Insurance Shopping Study – Wave 1.

The study examines insurance shopping and purchase behaviors and overall satisfaction among customers who recently purchased insurance across three factors (in order of importance): price, distribution channel, and policy offerings. Retention and shopping rates reflect Q2 2013 results.

J.D. Power reports that rate increases are driving more auto insurance customers to obtain competitive price quotes, while satisfaction with the purchase experience is trending downward among new buyers due to lower satisfaction with price.

Key findings of the study include:

— Price satisfaction declines to 808 (on a 1,000-point scale) in 2014, from 821 in 2013.

— Auto customer retention averages 97 percent, with 3 percent of auto insurance customers switching insurers, fueled by a shopping rate of 8 percent.

— More than 20 percent of new buyers purchased auto insurance online. Therefore, companies that lack a viable quote website are not well-positioned to acquire or sell to one in five customers.

— The average annual savings when switching to a new insurer is on par with 2013 ($387 vs. $386, respectively).

In a press release, Jeremy Bowler, senior director of the global insurance practice at J.D. Power, says:

As rate increases continue to drive customers to shop around for the best price, insurers need to provide a seamless shopping experience, including competitive websites with quote compatibilities and a satisfying on-boarding experience to acquire new customers.

Communicating new offerings and allowing customers to tailor their policies helps demonstrate the value of the policy and improve customer satisfaction.†

The 2014 U.S. Insurance Shopping Study – Wave 1, which for the first time is being conducted on a quarterly basis, is based on responses from more than 5,500 auto insurance shoppers.

Check out I.I.I. facts and statistics on auto insurance.

2 thoughts on “J.D. Power Reports on Auto Insurance Customer Satisfaction”

  1. Price as a key driver of satisfaction. Let’s dig deeper.
    Satisfaction – but not purchase decision or reason for carrier abandonment. With 97% retention and just 3% switching insurer from a measly 8% shopping rate, what do we have here? A picture of consumer ignorance. Too many drivers are happy with their price because they falsely believe it to be competitive, even extremely competitive. Many ‘price satisfied’ drivers are sold on auto insurance discounts because they falsely equate insurance pricing with that of conventional goods. Discount must surely imply good value. Too many drivers simply don’t appreciate the scope of premium variation, how and why this arises and what they should be doing.
    Namely to shop carriers hard and turn up that truly satisfying saving, above statistical average.

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