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Rising Prices, Low Satisfaction Drive 49% of Customers to Shop For New Auto Insurance

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Increased premiums combined with lackluster customer satisfaction scores are driving record numbers of auto insurance customers into the market for a new policy, according to the J.D. Power 2024 U.S. Insurance Shopping Study.

Nearly half (49%) of U.S. auto insurance customers say they are actively shopping for a new plan.

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U.S. auto insurance prices have jumped 22.2% year-over-year through the end of February—more than any other category of household expenses measured in the U.S. Department of Labor Statistics Consumer Price Index.

“After the past few years of steady auto insurance premium increases, customers are no longer passively keeping an eye out for a better deal,” said Stephen Crewdson, senior director, insurance business intelligence at J.D. Power. “Instead, they are actively seeking new carriers to offset these rising costs.”

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“However, with rising premiums across the country and fewer insurers explicitly offering usage-based insurance—or UBI plans—during the quoting process, insurance shoppers are not finding many alternatives,” he added.

Of the 49% of auto insurance customers who have actively shopped for a new policy in the past year, 29% have switched carriers. Switch-rates are highest among members of Generation Z, those aged 29 and younger, according to J.D. Powers’ report.

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Satisfaction levels are low: The average overall satisfaction among all auto insurance shoppers is 676 on a 1,000-point scale. Electric vehicle (EV) owners are even less satisfied, at 663 points, than customers insuring gasoline-powered vehicles. The gap is attributable to lower satisfaction with the quote process and policy price because EVs are typically more expensive to insure than comparable gas-powered vehicles.

Telematic offerings decrease; UBI satisfaction drops: UBI programs, which use telematics software to monitor an insured’s driving style and assign rates based on safety and mileage metrics, were only offered to 15% of insurance shoppers this year, down from 22% a year ago and 20% in 2022. Customers enrolling in UBI programs show just a 6-point increase in price satisfaction in 2024, which is down considerably from a 32-point difference in 2023.

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Dealer- and manufacturer-provided insurance growth: More than one-third (35%) of auto insurance customers say they are interested in embedded insurance, a form of auto insurance provided directly through the automobile dealer or manufacturer.

Who’s on top? Erie Insurance ranks highest among large auto insurers in providing a satisfying purchase experience, with a score of 730. Automobile Club of Southern California (AAA) (705) ranks second, and American Family (702) ranks third.

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State Farm and Progressive show increases in customer yield through the customer acquisition funnel, while GEICO’s acquisition funnel narrowed this year. Accordingly, State Farm and Progressive show gains in market share in this year’s study, while GEICO’s share is down.

Now in its 18th year, the J.D. Power U.S. Insurance Shopping Study captures advanced insight into each stage of the shopping funnel. It is based on responses from 10,003 insurance customers who requested an auto insurance price quote from at least one competitive insurer in the previous six months. The study was fielded from March 2023 through January 2024.

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For more information about the U.S. Insurance Shopping Study, visit https://www.jdpower.com/business/resource/jd-power-us-insurance-shopping-study.

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Auto
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