Are Insurance Customers Divorcing Their Agents In 2014? Recent Study Says…
Wondering just how enthusiastic insurance customers are about shopping around? Digital analysis firm comScore, Inc., recently took aim at this question and discovered that for the first time in five years, the percentage of consumers who shopped for insurance had dipped below 50 percent during a one-year period.
While auto insurance shopping was down slightly from its five-year high of 52 percent, the percentage of customers in serious consideration for switching their auto insurance policies was flat. Respondents to the comScore survey were also increasingly more open to the idea of buying policies online, up three percent from 2011 and one percent from 2012.
Online Quotes Remain Most Popular
The actual numbers showed that auto insurance shopping activities were down to 48 percent for 2013. There were also five percent fewer quotes submitted and a small 0.1 percent gain in the amount of policies purchased (a total of 3.1 million).
In a statement announcing the survey’s release, the company pointed out that, while fewer people are shopping and obtaining quotes, the number of shoppers obtaining more than one quote has increased six percent from 2012 to 2013, going from 57 to 63 percent. Around two-thirds (67 percent) get their quotes online as opposed to other methods.
“As consumer shopping behavior changes over time, it’s critical for auto insurance companies to understand the various factors that motivate consumers to shop for, retain, or change their auto insurance,” said comScore senior director Susan Engleson. “These insights can help insurers develop strategies for effectively influencing consumers before, during and after the shopping process, ultimately giving insurers a competitive advantage.”
That “competitive advantage” can ultimately go both ways. As with agents looking to distinguish products with lower prices, those looking to retain customers can point to discounts and coverages in place and show the contrast for those same policies with other insurers. The customer retention apparent in comScore’s report implies that existing insurers are keeping clients happy somehow — most likely by winning on price and coverage.
Awareness Is Up, But Customers Still Aren’t Getting PAYD
Perhaps one of the biggest cost-saving initiatives to hit auto insurance in quite some time are “pay as you drive” (PAYD) policies. In addition to the customer loyalty findings, the comScore report also revealed that customer awareness of PAYD is at an all-time high of 40 percent. However, in the wake of the Edward Snowden revelations and allegations of government overreach, privacy has become a significant concern among consumers.
Close to 25 percent of respondents called it “very much a concern” in the survey, while only nine of the 40 percent aware of PAYD had actually adopted it.
Since the survey, there have been more earth-shaking revelations from Snowden regarding the federal government’s National Security Agency (NSA), stoking flames of uncertainty and making consumers more standoffish regarding technologies like those that track driving behaviors in PAYD programs. While government spying has no obvious bearing on auto insurance policies, it’s a likely influence on consumer trust of technology and their willingness to interact with less familiar forms of it.
The comScore study was based on data from the company’s research panel of one million US consumers and a survey of more than 4,000 US Internet users conducted in July and August of 2013. It was released in October 2013.
There’s a lot to like on both sides of the comScore findings. Agents hoping to land new customers can benefit from the fact that more quotes are being requested by customers choosing to shop around with multiple insurers. On the other hand, the overall number of shoppers has receded, indicating that more customers are happy with their insurers now than they were a year ago. Finally, the slowness to adopt PAYD highlights where the areas of concern are for customers regarding this “policy of the future.” By knowing the issues, companies can retool their approach by offering privacy assurances and documented examples for how PAYD can result in cheaper rates.