Retention is on the Rise, Yet More Shoppers Switch Insurers

Jeremy Bowler

Although only 25% of auto insurance customers say they shopped for a new insurer during the past 12 months, which is down 8 percentage points from 2011, some 43% of these shoppers switched auto insurance providers, according to our 2012 U.S. Insurance Shopping Study.

This year’s switching rate among shoppers, which is up 3 percentage points from 2011, is the highest since we first began measuring retention in 2008. Our Insurance Shopping Study evaluates consumer shopping and purchasing behaviors and overall satisfaction among buyers who recently purchased auto insurance.

It’s likely that the increase in the proportion of shoppers actually switching insurers means that fewer price-checkers are gathering quotes, which may be a direct result of lower savings derived from switching. In fact, our findings indicate that the typical savings derived from switching has declined from an average of $412 in 2010 to an average of $359 during the past 12 months.

At the same time, customer retention rates are rising even though auto insurance companies are spending more money to entice customers to switch insurers. This is noteworthy since industry-wide advertising expenditures rose 12% in 2011 from 2010, based on analysis of data performed by Dowling and Partners, LLC. Continue reading ›

Satisfaction Improves the Most among Unbundled Auto Insurance Customers

Jeremy Bowler

For the first time, satisfaction with price is higher among unbundled auto insurance customers than among those customers who have more than one policy with the same provider, according to results in our 2011 U.S. National Auto Insurance Study, which is based on responses from nearly 28,000 auto insurance policyholders.

The overall industry satisfaction index for auto insurance customers who have their homeowners policy with another insurer, or who only have an auto policy, has increased considerably from 2010—up 21 and 26 index points, respectively, on a 1,000-point scale. In contrast, the average index among auto insurance customers who have their homeowners policy with the same insurer increases by just 7 points from 2010. Continue reading ›