The number of consumers shopping for auto insurance has declined, dropping to the lowest point in five years, according to the J.D. Power and Associates “2012 U.S. Insurance Shopping Study.”

According to the research, only one-quarter of insurance customers shopped for a new insurer this past year, an 8–percent decline from last year, but 43 percent of them switched carriers. That’s an increase of 3 percent from last year and the highest rate since 2008, the first year of the study.

“Although fewer consumers are shopping for insurance, more current customers who do are willing to make a switch based on competitive quotes,” said Jeremy Bowler, senior director of the global insurance practice at J.D. Power and Associates.

Bowler said the total volume of quotes declined in the second half of 2011 as a result of fewer consumers “price checking,” or casually comparing rates. This could be a result of the lower typical savings derived from switching, which has decreased from an average of $412 in 2010 to only $359 in the past 12 months. 

Bowler notes that customer retention rates are increasing, even as insurers are spending more money to entice customers to switch providers. Year-over-year, advertising expenditures increased by 12 percent in 2011 industry-wide, according to Dowling and Partners LLC, which conducted an analysis of statutory filings data.

Another find is the growing number of customers who want to self service, Bowler says. “We are seeing that one-third of shoppers are saying that their ideal is to successfully conclude the transaction via the Internet; to make the purchase and bind the policy all via the self-service channel. Sadly, the majority of insurers don’t make that very easy.” 

More than half of consumers (52 percent) start their shopping process online, according to the survey, and 73 percent visit at least one insurer’s website. The number of shoppers solely obtaining quotes online has doubled to 32 percent during the past three years, and in the most recent survey, 34 percent said they would most prefer to purchase their new policy online.

However, the process is of self-service is complicated, obtuse or hidden in some cases and occasionally offered only after business hours. “Consequently if we look at the block of agency companies, the big guys, and compare them to GEICO or Progressive, we find that the agency companies know how to follow through and close deals; while 16 percent of shoppers bother to go forward with an agent, 16 percent just stop right there,” Bowler said.

“Shoppers now expect to be able to visit an insurer’s website and complete their purchase in the same visit,” Bowler said. “In most cases, shoppers can compare many policies online and narrow down their search field entirely via this self-service paradigm. From that point, they can then decide if they need to speak with an agent or to continue their online purchase process.”

“If the website doesn’t offer [the shopper] the option to purchase and bind, they will just type in another carrier’s name and get going, and you’ve lost that opportunity for that policy. And the trend is for that proportion to keep growing,” Bowler said. “The majority, three out of four shoppers will visit your website first. About half of them are going to start requesting quotes via the Web and what we have seen is that only a small sub portion will prefer to step away form the Internet and conduct [the transaction] over the telephone or in person,” Bowler said.

The study examined shopping and purchasing behaviors and overall satisfaction among buyers who recently purchased insurance across three factors: distribution channel, policy offerings and price.


Highest Ranked Insurers

The Hartford ranked highest among auto insurers in providing a satisfying shopping experience, and received a score of 857 on a 1,000-point scale. The Hartford performed well in terms of policy offerings and price.

Liberty Mutual was next highest with 850 points, and American Family followed with 845 points. “The 2011 U.S. Insurance Shopping Study” was based on responses from more than 16,100 shoppers requesting an online auto insurance price quote from at least one insurer in the past year. It included more than 50,000 unique insurer evaluations and was conducted from January to February 2012.


The Hartford: 857

Liberty Mutual: 850

American Family: 845

Nationwide: 841

Amica Mutual: 839

State Farm: 839

Erie Insurance: 836

MetLife: 834

Auto-Owners Insurance: 832

GEICO: 832

Ameriprise: 830

Auto Club Grp, SOCAL: 828


Safeco: 825

21st Century: 824

Farmers: 821

Allied: 820

Esurance: 819

Travelers: 819

Allstate: 817

AAA NCNU Ins. Exch: 816

Progressive: 815

GMAC: 808

Mercury: 808

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