Auto Insurers Fail to Catch Most New Shopper

The study finds that 36 percent of auto insurance customers have actively shopped for a new insurer in the past year but these shoppers ignored key insurance brands when they shopped.

The study examines the behaviors of auto insurance customers who recently shopped for a new insurance company. The study, which aims to better understand why shoppers either avoided, ignored or considered but did not purchase from insurance companies, also profiles 26 of the largest personal auto insurers in the United States.

On average, 38 percent of shoppers do not recognize various insurance companies examined in the study, while an additional 39 percent of shoppers ignore certain companies during their shopping process, completely excluding them from their consideration set. Additionally, 6 percent of shoppers avoid the average insurance company and indicate that they would never consider them for their insurance needs. Overall, only 18 percent of prospective customers consider any given insurance company when they shop.

The study also finds that most prospective customers who consider an insurance company but do not request a quote gather information via the Internet, with more than 60 percent visiting the insurance company’s Web site or responding to an Internet advertisement or blog posting. Insurance companies lose more prospective customers, on average, through the Web channel compared with telephone and in-person sales channels. In fact, traditional phone and in-person sales channels achieve a 52 percent close rate, on average, while online channels successfully close sales less than 20 percent of the time.

The 2008 Insurance Escaped Shopper Study is based on responses from more than 8,400 auto insurance shoppers. The study was fielded in April 2008.

Sources:
J.D. Power and Associates
www.JDPower.com
The McGraw-Hill Companies
www.mcgraw-hill.com