J.D. Power: Auto insurance shopping rates increase in 2023

JD Power US Insurance Purchase Survey 2023recently released with results for the first quarter of 2023, reports that auto insurance purchases have continued to rise since the end of 2022. As inflation continues to drive up premium rates – auto insurance costs jumped 14.5% in February 2023, more than double the 6% inflation rate – consumers are more focused on finding the right price for their budget and saving money. leading to the sharp increase in purchases and switching seen last quarter.

“Auto insurance customers are starting to buy insurance the same way they buy gasoline,” Stephen Crewdson, senior director of insurance business intelligence at JD Power, said in a press release. “They are taking a much more proactive stance in finding plans that fit their needs and their budgets, which can have major long-term implications for carriers that have worked for years to create lifetime value through bundling and other initiatives. In the near term, this buying trend is showing increased customer interest in usage-based insurance (UBI) plans and some redistribution of market share among top carriers.”

The UBI adoption trend also continues as customers prioritize ways to save money. UBI programs are becoming more accessible to customers, with programs purchased 18% of the time and offered by 22% of auto insurance buyers—a 12% increase in purchases and a 16% increase in offers since 2020.

Crewdson writes digital insurance, “Our 2023 U.S. insurance shopping survey shows that more auto insurance buyers are being offered UBI at the time of purchase, and more people are choosing UBI (and getting a discount) than ever before. As the UBI offer becomes more ubiquitous, the impact on overall satisfaction is declining this year, but as insurance premiums soar, the effect of the UBI offer has an even greater impact on price satisfaction than in past years.”

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The report notes that customer satisfaction increased by as much as 6 points when the UBI product was introduced. Overall, for the first quarter of 2023, average auto insurance buyer satisfaction remains the same as last year, at 861 out of 1,000 points, despite an increase in purchases and switching to insurance companies. The study reports that the average 30-day purchase rate in March 2023 was 13.1%, up from the 11.4% average in 2021, and the average 30-day switch rate was 4.1% higher than in an average of 3.4% observed in 2021. 2021.

The study ranks State Farm as the top major auto insurance company for customer satisfaction, followed by Liberty Mutual and Nationwide, respectively. Hartford ranked #1 among medium-sized insurers for the second year in a row. Erie Insurance and Automobile Club of Southern California is next in first place.

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