Want some surprising news? J.D. Power and Associates has released the findings of their 2012 U.S. Insurance Shopping Study. The study revealed over the last twelve months, new auto insurance purchases were lower than they’ve been in the last six years. So what’s wrong?
Moreover, the study, conducted by the company which is best known by consumers for their JD Power Ratings, also revealed there are more people willing to switch insurance companies for a better price. An easy explanation might be that average savings dropped to $359 per year compared to last year’s average of $412. Additionally, the percentage of people who visit the websites of insurance companies increased to 73 percent. Nevertheless $359 is still a good amount of money and the actual saving potential could be much in your individual case.
Good news for us, the global insurance practices division of J.D Power senior director Jeremy Bowler finds shoppers narrow their choices through online quote comparisons. Once they’ve found their top choice, they decide whether or not they need an agent’s help to complete the purchase.
With increased technology of the internet and mobile applications, insurance shoppers also use this technology when shopping for most anything. Why not car insurance, too? Insurance companies will need to keep up with the latest integrated systems that allow customers to do their own quoting and policy setup in order to remain competitive or gain a competitive edge in the market.
This trend could put a few agents out of jobs or into different departments, but overall it should help companies recoup their technology investments with fewer agents to pay. This isn’t good news for insurance agents, especially direct or captive agents who only sell one for one company.
In the long run, it’s whatever customers need to be happy with their purchases and stay with an insurer. Companies may want to renew focus on retaining the customers who switched in order to turn new customers into long-term customers, which greatly affect affects profit.
To that end, insurance companies should couple the findings of the U.S Insurance Shopping Study with the U.S National Auto Insurance Study also done by J.D. Power. The 2011 results found the highest satisfaction among customers who were able to complete entire interactions with an insurance company online, and also those who can both purchase their insurance and have it serviced online or mobile apps.
If companies focus on those parts of customer satisfaction, switching may slow down, but retention could be significant, growing an insurer’s profit margin.
Business for insurance companies aside, there may be a time in the near future when insurers begin to work so hard at customer retention that customers will benefit greatly from it. Whether this means cheaper premiums, extra coverage options, better claims experiences, or an overall customer satisfaction increase is to be seen, but one thing is for sure—insurers are going to have to do something to keep policyholders on the books, increase their presence, and work harder than ever to set themselves apart.
Our comment: Just have a read in our info center, which aims to bring you the guidance of an agent online and check out our quick car insurance calculator for easy quotes and rate comparisons online. $359 would be still a good chunk of money.
