Auto insurers are finding it harder to attract new customers as consumers boost comparison-shopping, but stay put unless they find significant deals, J.D. Power found in its latest annual customer satisfaction survey.
The J.D. Power 2015 Insurance Shopping Study determined that insurer close rates are down to 13 percent in 2015, versus 18 percent in 2014. This is happening even as insurers hiked rates by 2.1 percent on average nationally in 2014, after pursuing a 2.5 percent increase in 2013. (Close rates reflect the ability to convert a prospective shopper from quoting to closing, J.D. Power said.)
J.D. Power explained that the hikes drove consumers to shop for a better deal; 39 percent did so in 2014 versus 32 percent in 2013. But among those who comparison-shopped just 29 percent actually switched in 2014, down from 37 percent in 2013.
At the same time, 53 percent of retained customers said they stayed with their old insurers, up 10 percent from 2014, and that their insurer had the lowest price.
It turns out consumers are simply being very selective, Valerie Monet, director of J.D. Power’s insurance practice, said in prepared remarks.
“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,” Monet said.
Customers who do shop and find a better deal will switch, and their satisfaction scores spike after they do. J.D. Power said that the purchase satisfaction score for folks who switched insurers jumps to 833 in 2015, a 12-point improvement versus 2014.
Monet said that consumers are valuing more than just price in the end.
“Many customers are obtaining quotes and gathering information on insurer websites or through aggregators,” Monet said. “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.”
Source: J.D. Power