The legions of temporary auto insurance discounts and premium givebacks issued recently to help customers deal with pandemic financial fallout fell short in ensuring customer loyalty, J.D. Power determined in a recent survey.
While 57 percent of consumers said the premium relief should ease financial pressures, customers want far more relief. J.D. Power found that 30 percent of respondents are reducing coverage, and 27 percent are looking for another carrier in order to cut costs. About 26 percent said they’re exploring increasing deductibles to save money in these trying times.
What’s more, COVID-19 has spurred a surge in insurance comparison shopping, J.D. Power said. Customers are now 1.3 times more likely to look at rivals and 1.7 times more likely to cancel even if they feel premium relief was enough to get the job done. Respondents are also 1.8 to 2 times more likely to shop around, switch or cancel if they feel the premium relief did not ease their financial pressures, J.D. Power said.
Not surprisingly, J.D. Power said that carriers will be dealing with a near-term surge in customer/shopping and switching, both from financially strapped customers and those already aware of industry-wide COVID-19 relief efforts.
“It is reasonable to assume that as more customers become aware, they will be less likely to agree that premiums actions provided required level of financial relief,” the study found. “Non-standard markets could be especially impacted over the course of the next several weeks as their customers become aware. ”
Other survey findings:
- 37 percent of customers are aware that their carrier announced a premium relief program.
- 29 percent of “lower credit-tier consumers” are aware of premium relief announcements.
- Telematics adoption is likely to catch on more than ever, as customers seek cost savings.
- Customers are demanding high levels of service during the pandemic. J.D. Power cautions that insurers should maintain access and service levels during high call volumes to help reduce the urge of customers to shop around and switch.
J.D. Power’s full report is “Auto Insurance During COVID-19 – Premium Relief: Consumer Impact and Outlook.” The market research firm has been conducting weekly pulse surveys since March 24, reaching more than 4,000 total respondents. Its current report captures data through April 14.
Source: J.D. Power