While price is a key motivator in the auto insurance shopping process and final purchase decision, its impact on new-buyer satisfaction has declined, compared with one year ago, according to a new industry study.
The J.D. Power and Associates’ “2010 U.S. Insurance Shopping Study” found price is the leading reason – cited by 41 percent of shoppers – that insurance shoppers consider an insurer but do not obtain a quote from that insurer. In addition, 76 percent of shoppers who obtained a quote from an insurer but did not purchase a policy from that insurer cite price as a reason. However, price accounts for only 28 percent of overall customer satisfaction with the purchase experience-less important than both policy offerings (29 percent) and distribution channel (43 percent).
“While competitive pricing is critical to closing the sale for most shoppers, insurers must perform on all elements of the purchase experience to gain and retain satisfied customers,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates.
Ten percent of auto insurance shoppers did not select the lowest price quote they received, the study found.
Gen Y Shoppers
The J.D. Power study also found a number of key trends among the insurance buying habits of Generation Y auto insurance shoppers (those born between 1977 and 1992).
Generation Y shoppers tend to be less sensitive to price, as only 68 percent cite price as a reason for shopping for a new auto policy, compared with 83 percent of Baby Boomer shoppers (those born between 1946 to 1964). More than one-half (58 percent) of Generation Y shoppers have used insurers’ Web sites to gather information when shopping for auto insurance, compared with 46 percent of Baby Boomer shoppers.
Bowler says it’s important for insurers to understand the differences between Generation Y and Baby Boomer insurance shoppers and respond to these differences accordingly.
The “2010 U.S. Insurance Shopping Study” examines consumer shopping and purchasing behaviors and overall satisfaction of buyers who recently purchased from an auto insurance provider. The study is based on responses from more than 14,500 shoppers who requested an auto insurance price quote from at least one competitive insurer in the past 12 months and includes 68,051 unique insurer evaluations.
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