The latest J.D. Power 2023 U.S. The Insurance Shopping Study revealed that the nation's auto insurers are facing inflation, rising premiums, and rising customer churn rates.
The study showed growing interest in usage-based insurance (UBI) plans, with more buyers looking for plans that fit their needs and budgets, which could have a long-term impact on carriers that bundle. Working to increase lifetime value through and other measures. This is according to a JD Power press release.
According to Stephen Crewdson, senior director of insurance business intelligence at JD Power: "Auto insurance consumers are starting to shop for insurance like they shop for gas. They're taking a much more proactive stance in looking for plans that Adapt to their needs and their budget."
The 30-day average purchase rate reached 13.1 percent in March 2023, the highest rate since June 2021 and well above the 2021 average of 11.4 percent.
The 30-day average switch rate reached 4.1 percent in March 2023, compared to an average of 3.4 percent in 2021.
Saving money is emphasized as auto insurance costs rise 14.5% in February 2023, more than double the rate of inflation (6%), making autos an ever-increasing share of consumer discretionary spending. An insurance account is created.
The study also revealed that UBI programs, which monitor a user's driving style using telematics software and assign rates based on safety and mileage metrics, are now offered to 22% of insurance buyers. are visited and purchased 18% of the time.
This number is higher than the 16% offer rate and 12% purchase rate in 2020. When carriers offered the UBI option, customer satisfaction increased by 6 points.
GEICO's slow progressive gains in market share saw its rates rise significantly above the industry average in the second half of 2022.
In contrast, the progressives raised rates in the first quarter of 2022 and then posted below-average increases during the second half of the year.
During the same period, Progressive made significant gains in market share, becoming the second largest auto insurer in the United States, ahead of GEICO and behind State Farm.
The JD Power Study ranked State Farm the highest among major auto insurers in providing a satisfying shopping experience for the third year in a row with a score of 877. Liberty Mutual (865) is second, and Nationwide (861) is third.
Hartford ranked highest among mid-sized auto insurance companies for the second year in a row with a score of 887. Erie Insurance (878) is second and the Automobile Club of Southern California (AAA) (870) is third.