A poor experience, not just premium increases, is a top reason for policyholders to search for a new auto insurer, according to a new U.S. study from J.D. Power.
According to its 2014 study, which looks at customer experience based on price, distribution channel and policy offerings, 30% of auto customers shopped for a new insurer in 2013, and among those, 36% did switch providers.
Overall, new-buyer satisfaction with the auto insurance purchase experience averages 821 (on a 1,000-point scale), down from 828 in the previous year’s study, the firm said.
That decline in satisfaction is driven by a 17-point drop in the price factor, which has the greatest impact on satisfaction, it said.
However, price isn’t always the top driver for shopping around for a new insurer. Those who experience a premium increase shop at a rate of 13%, while those who report a poor experience shop at a rate of 28%, J.D. Power said.
Still, 80% of customers do select the lowest-priced insurer, and rate increases of more than $200 were more likely to cause policyholders to switch providers, J.D. Power suggests.
“The insurance industry spends billions of dollars each year on advertising, and over the last seven years many of those ads have tried to entice customers with big savings,” Jeremy Bowler, senior director of the insurance practice at J.D. Power said in a statement.
“While switching to a new insurer usually results in savings, the ads make promises of savings that a growing number of new customers don't believe they've received.”
The firm’s 2014 U.S. Insurance Shopping Study was based on responses from more than 16,900 shoppers who requested an auto insurance price quote from at least one competitive insurer in the past nine months and included more than 50,000 unique customer evaluations of insurers. The study was fielded in July 2013, October 2013 and January 2014.
Source: DAILY NEWS Apr 24, 2014 2:59 PM
http://www.canadianunderwriter.ca/news/poor-experience-not-just-price-top-reason-consumers-look-to-switch-insurers/1003029265/
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