How AI can influence auto customer decision-making: J.D. Power

Prior research shows that insurance shoppers have been using digital tools to research insurance information, but AI tools are also becoming a new avenue for customers shopping for new quotes or coverage options.

In an analysis of 8,352 customer responses, J.D. Power's AI insurance experience study found that 29% of auto and home insurance customers use AI to research coverage and claims information, manage accounts and shop for new insurance options. J.D. Power's analysis also found that 37% of customers who used AI to research insurance options changed their policy based on the information that the AI tool provided to them, and 42% of those who used AI to shop for quotes did purchase a new policy.

"Just as we've seen with the internet and mobile apps, AI is rapidly becoming a critical conduit to key policy shopping, research and account management decisions among auto and home insurance customers," said Tony Soloman, director of insurance intelligence at JD Power, in the press release. "This is a multi-dimensional challenge and opportunity for insurers. First, the tools they provide on their websites and mobile apps need to deliver a comprehensive, helpful user experience. In addition, insurers need to recognize that many customers are using third-party AI chatbots and apps to conduct research and compare policies, so it is critical to stay on top of how their data and content are being ingested and interpreted by the major large language models."

More than one-third of those using AI for research, 34%, are utilizing tools provided by their insurers' website or app, and 33% are using third-party websites or apps. While AI-usage among insurance shoppers is growing, the majority of customers, 71%, are not using AI to research or shop policy options. 

"It's still relatively early in the evolution of insurance-specific AI tools developed by insurers to help their customers understand complex concepts, manage their accounts and compare coverage options, but these tools are on their way to becoming some of the most important investments insurers will make during the next several years," said Eric McCready, director of digital solutions at JD Power, in the press release. "Customers are actively using these tools and comparing results with widely available third-party tools and making big decisions based on the results. In many ways, the future of the auto and home insurance customer experience will be dictated by how well insurers execute their AI offerings."