Eight in 10 auto insurance shoppers continue to select the lowest-priced insurer. However, satisfaction with the new-buyer purchase experience, consisting of price, distribution channel and policy offerings, once customers have selected a new insurer will make them stay. And, Erie Insurance, MetLife and State Farm do this best, according to the J.D. Power 2014 U.S. Insurance Shopping Study.
The industry’s new-buyer satisfaction with the auto insurance purchase experience averages 821, on a 1,000-point scale, down significantly from 828 in 2013. The decline in satisfaction was driven by a 17-point drop in the price factor. Declining new price satisfaction is the primary reason customers are less satisfied when they do switch insurers, according to J.D. Power. Among customers who are highly satisfied in their first year with their insurer (overall satisfaction scores of 850 or higher), 81 percent remain with that insurer and only 41 percent shop other insurers. Among customers with lower satisfaction in the first year (809 or lower), only 61 percent remain with that insurer and 61 percent shop.
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“The insurance industry spends billions of dollars each year on advertising, and over the last seven years many of those ads have tried to entice customers with big savings,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power. “While switching to a new insurer usually results in savings, the ads make promises of savings that a growing number of new customers don’t believe they’ve received.”
Erie Insurance ranks highest among auto insurers in providing a satisfying purchase experience for the second consecutive year, with a score of 843. Erie Insurance performs particularly well in all three factors — price, distribution channel and policy offerings.
The full ranking:
Erie Insurance 843
MetLife 839
State Farm 839
Ameriprise 835
American Family 835
The Hartford 834
Liberty Mutual 833
Automobile Club Group 827
Esurance 826
Auto Club of Southern California Insurance Group 825
GEICO 825
Allstate 823
Nationwide 821
CSAA Insurance Group 819
Amica Mutual 815
Farmers 807
Progressive 805
Safeco 804
21st Century 800
Travelers 788
Mercury 774
USAA 876 (J.D. Power separates USAA because their products are only available to U.S. military personnel and their families)
J.D. Power’s study is based on responses from more than 16,900 shoppers who requested an auto insurance price quote from at least one competitive insurer in the past 9 months and includes more than 50,000 unique customer evaluations of insurers. The study was fielded in July 2013, October 2013 and January 2014.
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