Who do you want to be your customer? If the answer to this is almost everyone (low-risk of course), you’re likely not alone. However, that is a pretty diverse and large group, and many of them have different shopping processes, especially when it comes to online shopping.

The “Insurance Consumer Dynamics” study by Acxiom Corp., an interactive marketing services provider, reveals which consumer segments are more likely to maintain policies with their current insurer, and which are actively looking for change to fulfill their auto insurance needs.

The data used in this study is developed from large repositories of U.S. consumer intelligence (InfoBase-X), Acxiom’s PersonicX life-stage segmentation and additional attitudinal and behavioral consumer survey data integrated from mediamark Research & Intelligence (mRI), BIGresearch and comScore. Then, based on behavioral variables, Acxiom grouped consumers into three segments:

1.    Staying the Course represents the status quo. These consumers value the agent relationship, are the most economically stable, have the highest income and are least likely to shop around.

2.    Open to Options consumers believe price is important, but is not the only consideration. They have the most adults and vehicles per household. They are economically stable in the mid-range of incomes. They are willing to consider a good value but are not desperate to change.

3.    Cutting Corners is looking for ways to save. Household members share vehicles and are actively engaged in price shopping. They rank at the bottom of the scale in economic stability.

This segmented approach enabled Acxiom to draw conclusions about effectively reaching high-value, high-potential customers for their business model, and those customers who also are receptive to offers.

According to the study, Cutting Corners and Open to Options consumers are ripe for change. Insurers who service Open to Options consumers know that they have the potential to be long-term customers if they treat them well and foster a sense of trust along the lines of “your challenges are my challenges.” Fail to meet their needs, however, and once gone, they may not come back. Insurers who would fare best with Cutting Corners consumers are those who approach the business aggressively, keep tight control on expenses and use volume as a counter-balance to the lower margins these customers provide.

Also evident in the study is the importance of appropriate distribution channels. The agent is still the preferred acquisition channel, but with many consumers, the agent model is under siege. Even consumers who value their agent are increasingly turning to online research and quoting.

In addition, the popularity of Internet shopping and rate comparing by consumers makes being in the online space even more critical for every type of insurer. As broadband technology becomes more and more ubiquitous, being online with an easily navigable site will be the new cost of doing business in the auto insurance sector.

Chad Mitchell, a senior analyst with Forrester Research Inc., expects U.S. consumers to use comparison sites more over the next two years.

“Our data shows continued growth in online auto insurance shopping,” he writes on InsuranceNetworking.com. “More U.S. consumers will go online to lower their premiums during the recession, and comparison sites are the perfect tool.”

Acxiom, suggests that segmenting consumers using the Web for auto insurance shopping can help carriers determine the most appropriate message to communicate, and specifically target those segments most likely to respond.

"When it comes to the future of auto insurance, consumers are clearly in the driver's seat," says Holly Marr, Acxiom’s VP, insurance practice. "Through their intentions and actions, consumers are creating a blueprint for insurers on how to structure the ever-evolving agent and/or direct model. The hallmark of that model is the need for value propositions tailored to individual customer preferences.”

To download a free copy of the “Insurance Consumer Dynamics” study, click here.

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