According to the 2021 Q4 report from J.D. Power, consumers are seeking personalized auto insurance experiences. Because of increasing premiums, consumers across all credit tiers said they were likely to seek personalization of auto-risk programs, like odometer-based mileage reporting and other telematics-based pricing systems.
While the number of auto insurance consumers shopping for new companies remained steady through the last quarter of 2021, the number of folks who are switching insurance companies has increased, according to the Q4 Quarterly Shopping LIST (Loyalty Indicators and Shopping Trends) report from J.D. Power.
According to the report, which surveyed 104,000 participants, the top reasons for shopping and switching insurance companies are “related to the value that consumers are seeking due to increasing prices of insurance contrasted with individualized decreasing use of their vehicles.”
Because of increasing premiums, consumers across all credit tiers said they were likely to seek personalization of auto-risk programs, like odometer-based mileage reporting and other telematics-based pricing systems.
J.D. Power created a ranking of customer loyalty to insurance companies based on reported shopping trends, and found the highest customer loyalty for NJM, Amica, USAA, Erie and The Hanover, and the lowest customer loyalty for National General, Kemper, Progressive, COUNTRY and GEICO.
According to J.D. Power, higher-risk consumers were less likely to shop for insurance than lower-risk consumers in 2020, but that trend flipped in the Spring of 2021 and continued through Q3.
“Lowering premium costs remained the primary motivation for auto insurance shopping,” Director of Personal Lines Market Strategy at TransUnion Michelle Jackson said in the report. “In addition, 2021 saw an increase in telematics adoption, with 49% of consumers opting into a program when presented a telematics option, according to a TransUnion survey. With insurance rates decreasing or staying the same for nearly three-quarters of those that enrolled, telematics programs may present an alternative option to pursue lower insurance costs.”
They found that, no matter their credit tier, consumers are seeking value and personalization in their insurance programs. Of those surveyed who have switched carriers, 3.6% of those with excellent or good credit and 4.8% of those with fair or poor credit said they shopped because of usage-based insurance programs.
Overall, the report reveals a desire from many consumers to step away from traditional time-period based insurance contracts and toward programs that take into consideration their personal auto usage and driving habits.
You can view J.D. Power’s full Q4 report, which was created in collaboration with TransUnion, can be found here.
Article Source: NUPropertyCasualty360
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