Nearly half of auto insurance customers have shopped around for new policies during the coronavirus pandemic, but few cared about specific brands, according to the J.D. Power 2021 U.S. Insurance Shopping Study.
Among the 46 percent who made changes, 17 percent reduced coverage and 15 percent shopped for another carrier entirely, the survey found. Approximately 12 percent went for an increased deductible or switching to another carrier.
Interestingly, J.D. Power found a 6 percentage-point increase in shopping activity from customers who had a pandemic-related change in their financial circumstances. Behind that number: a pandemic-driven 55 percent decrease in the average number of miles driven and a record 15 percent unemployment rate at the start of the COVID-19 pandemic in early 2020.
“The pandemic has revealed a lot about insurance shopping behaviors in 2020, as there was a significant surge in shopping activity among customers who were financially affected and many gravitated to big, well-known brands and offers for lower rates,” Tom Super, head of property & casualty insurance at J.D. Power, said in prepared remarks.
Super said the results underscore the need for insurers to obtain more sophisticated acquisition and retention tools to help set themselves apart.
“Ironically, while the industry’s estimated annual ad spend now nears $10 billion, consumers say they see less differentiation among the top brands,” Super said. “Following a period of massive disruption and a prolonged, uneven recovery, auto insurance customers have a heightened expectation about factors such as price, flexibility and coverages. Insurers need to get more creative around customer service and delivery because the current incremental changes are missing the mark.”
About 54 percent of auto insurance customers took no action to manage their insurance costs during the pandemic, J.D. Power said.
Here are additional result highlights:
Source: J.D. Power