At least $40 billion in auto insurance premiums were up for grabs in the past 12 months, a new study finds.
The Insurance Consumer Dynamics Survey from Little Rock, Ark.-based Acxiom Corp. surveyed 2,368 adults with auto insurance to explore current shopping behaviors and the dynamics of carrier-consumer relationships.
The numbers revealed that customers are increasingly ready to shop around. Indeed, one in four respondents said they shopped for auto insurance within the past 12 months, and one-third of those shoppers, representing 9.2% of all auto insurance customers, changed carriers within the past year.
Not surprisingly price was a prime consideration for those shoppers. This trend was marked among younger consumers.
“The 18–34 age group in particular may be more open than older customers to consider switching carriers for relatively small differences in their premiums,” the report states.
Thus, the challenge for carriers is to keep their young customers engaged and satisfied. Axciom say carriers can employ business intelligence tools to target market segments with unique product and price offers developed specifically for them.
The report says this retention is crucial because the longer a customer is with a carrier, the more substantial the savings needs to be before they will consider a switch.
“Customers with a carrier for less than five years are twice as likely to shop,” the report states. “This suggests that marketers emphasize value-recognition strategies and tactics during a customer’s initial years with them.
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