Despite an industry-wide ad blitz beckoning them to switch, three-fourths of motorists never pick up the phone or click on a website to get an auto insurance quote.
It’s virtually impossible to watch television or listen to the radio these days without seeing or hearing an ad exhorting consumers to switch their car insurance companies. Providers spent an estimated $5.7 billion in advertising and promotional allowances during 2011, according to an analysis performed by Dowling and Partners, LLC, which is a 12 percent increase over 2011’s collective media budget.
Yet despite the industry’s advertising assault only 25 percent of policyholders said they’d shopped for a new insurer over the last 12 months, which is an eight percent drop from 2011 and is the lowest rate in five years.
That’s according to the recently released 2012 U.S. Insurance Shopping Survey conducted by the research firm J.D. Power and Associates. While most consumers seem happy with the current auto coverage, the study also found that of consumers who did test the waters, 43 percent wound up switching providers, which is up by three percent over 2011 and is the highest rate since J.D. Power began measuring policyholder retention in 2008.
“Although fewer consumers are shopping for car insurance, more current customers who do are willing to make a switch based on competitive quotes,” says Jeremy Bowler, senior director of the global insurance practice at J.D. Power and Associates.
Those who switched carriers saved an average $359 on their premiums, the study determined; while that’s still significant savings it’s down from an average $412 in 2010. “The increase in the proportion of shoppers actually switching suggests that fewer price-checkers are gathering quotes they are less likely to act upon, perhaps a direct result of the lower typical savings derived from switching,” Bowler says.
The J.D. Power 2012 U.S. Insurance Shopping Survey cited The Hartford as providing the most satisfying auto insurance shopping experience among all carriers, performing particularly well in terms of its policy offerings, pricing and call-center representatives. Other auto insurance companies rated highly for overall customer satisfaction included Liberty Mutual, American Family, Auto Club Group, Nationwide, Amica Mutual, State Farm, Erie Insurance and MetLife.
The survey also found that an increasing number of auto-insurance shoppers are relying solely on the Internet to obtain quotes, with the proportion of consumers doing their research electronically having jumped by more than 50 percent over the last three years. According to J.D. Power, 52 percent of those shopping for car insurance in the past 12 months began the process via the Internet, with 73 percent visiting at least one insurer’s Web site at some point during their shopping experience. While many of these website visits were merely for informational purposes, 32 percent of customers said they obtained price quotes online without ever physically contacting an agent.
“In most cases, shoppers can compare many policies online and narrow down their search field entirely via this self-service paradigm,” says Bowler. “From that point, they can then decide if they need to speak with an agent or to continue their online purchase process.”
Not surprisingly, Internet auto-insurance shoppers tend to be younger and more-often single than those who obtained quotes directly from agents. They also typically gather multiple quotes and are more likely to be “seriously shopping” for a new policy rather than merely price checking. Insurers who got top marks for their websites in the J.D. Power survey included Progressive, Esurance, Nationwide and USAA.
