Price is a key motivator in the insurance shopping process and final purchase decision, gaining in impact on new-buyer satisfaction, compared with one year ago, according to a new study released by J.D. Power and Associates.
According to the JD Power and Associates 2010 US Insurance Shopping Study, 41% cite that insurance shoppers consider an insurer but do not obtain a quote from that insurer. In addition, 76% of shoppers who obtained a quote from an insurer but did not purchase a policy from that insurer cite price as a reason. However, price accounts for only 28% of overall customer satisfaction with the purchase experience less important than both policy offerings (29%) and distribution channel (43%).
The firm said that 10% of auto insurance shoppers did not select the lowest price quote they received, with some shoppers foregoing considerable savings. 12% of shoppers who didn’t choose the lowest price insurer could have saved more than $250 had they chosen the lowest quote.
Erie Insurance, with a score of 886 on a 1,000-point scale, was ranked highest among auto insurance companies in satisfying new buyers with the purchase experience for a third consecutive year, while the Hartford gained the second spot with a score of 868, followed closely by Auto-Owners Insurance (867).
The study also found that Generation Y shoppers tend to be less sensitive to price, as only 68% cite price as a reason for shopping for a new auto policy, compared with 83% of Baby Boomer shoppers (those born between 1946 to 1964). More than one-half (58%) of Generation Y shoppers have used insurers’ websites to gather information when shopping for auto insurance, compared to 46% of Baby Boomer shoppers.
Jeremy Bowler, senior director of the insurance practice at JD Power and Associates, said: Generation Y is the next big wave of new homeowners and parents with more complicated insurance needs.
“As a result, it’s important for insurers to understand the differences between Generation Y and Baby Boomer insurance shoppers and respond to these differences accordingly. At more than 70 million strong, this group will have a dramatic impact on the insurance distribution landscape in the years ahead.