Auto insurance rates increased by 2.1 percent on average nationwide last year, but while more people are shopping for lower rates fewer actually are switching, according to J.D. Power’s “2015 U.S. Insurance Shopping Study.” The study measured insurance shopping and purchase behavior as well as purchase-experience satisfaction across three factors: price, distribution channel and policy offerings, J.D. Power said.

For the third-consecutive year, Erie Insurance ranked highest in providing a satisfying purchase experience with a score of 870, up from 843 in 2014. Erie Insurance performs well in all three factors and improved significantly in the price and distribution channel factors, J.D. Power said. Ameriprise and The Hartford tied for second with scores of 869; CSAA Insurance Group ranked fourth (861) and Amica Mutual ranked fifth (850).

Last year, 39 percent of consumers shopped for a better deal, J.D. Power said, compared with 32 percent in 2013; the study finds that among those who shopped, only 29 percent actually switched in 2014, compared with 37 percent in 2013.

"Customers are being pushed into the market due to rate increases, but unless they can find a policy that will save them money, they're not switching providers," said Valerie Monet, director of the insurance practice at J.D. Power. "In fact, many of those customers can't find a better deal and ultimately don't switch insurers."

Fifty-three percent of retained customers said they stayed with their insurer, up 10-percentage points from 2014, and that their insurer offered the lowest price. Twenty-nine percent of customers said they had found a better deal and switched, down 12 percentage points from 2014.

"Customers who shop and do find a better deal will likely switch insurers, and increasing satisfaction scores among customers who recently switched suggests that those customers are pleased with the price they receive," Monet said.

Among who switched insurers, satisfaction with the purchase experience improved by 12 points to 833 year-over-year, J.D. Power said. A 13-point improvement in the price factor, which was the  leading driver of customer satisfaction with the purchase experience, was found to be  the primary driver of higher overall satisfaction in 2015.

Shoppers who switched saved $388 on average in 2015, compared with $340 in 2014 and $351 in 2013, J.D. Power said, and for each $50 increase in savings, satisfaction with price increased by approximately 25 points, on average. However, other factors contribute to a positive experience.

"When looking exclusively at price, consumers may find the grass is not always greener," Monet said. "Many customers are obtaining quotes and gathering information on insurer websites or through aggregators, but the day-to-day interactions they have with their insurer, especially if they have to file a claim, will be the ultimate moment of truth for the customer."

Highlights from the Report:

  • Insurer close rates, the ability to convert a shopper from quoting to closing, decreased to 13 percent in 2015 from 18 percent in 2014
  • Optimizing marketing and advertising efforts to ensure strong brand awareness among prospective customers is critical for insurance providers. Despite increasing its advertising spend by 6 percent in 2015, compared with 2014, brand awareness of insurers declined to 60 percent in 2015 from 62 percent in 2014.

Study Rankings:

Overall Satisfaction Index Rankings  
(scale of 1,000 points)

 

J.D. Power.com Power Circle Ratings for Consumers

Erie Insurance                                                      

870

5

Ameriprise                                                           

869

5

The Hartford                                                         

869

5

CSAA Insurance Group                                       

861

4

Amica Mutual                                                   

850

4

Liberty Mutual                                                 

848

4

Automobile Club Group                                       

846

4

Auto Club of So. California Ins. Group     

838

3

Travelers                                              

838

3

GEICO                                                

836

3

Auto-Owners Insurance                            

834

3

Nationwide                                                

834

3

State Farm                                                 

834

3

MetLife                                                     

833

3

Industry Average                                            

833

3

Allstate                                                       

832

3

Farmers                                                  

831

3

Safeco                                                     

825

3

Esurance                                        

821

3

American Family                               

818

3

Progressive                                           

817

2

21st Century                                          

807

2

Allied                                                         

802

2

Mercury                                                       

791

2

*USAA                                                     

896

5

Power Circle Ratings Legend

5 – Among the best
4 – Better than most
3 – About average
2 – The rest

The “2015 U.S. Insurance Shopping Study” was based on more than 15,600 responses from shoppers who requested an auto insurance price quote from at least one competitive insurer in the past nine months, and includes more than 50,000 unique customer evaluations of insurers. The study was fielded in May, July and October 2014, and January 2015.

* USAA is open only to U.S. military personnel and their families, and therefore was not included in the rankings. National General was included in the study but not eligible for award due to not meeting minimum sample requirements.

 

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