Not Much Movement In Number of Auto Insurance Shoppers

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    Competition in the auto insurance industry has grown increasingly cutthroat in the last few years, as many companies are trying to lure clients away from each other on a fairly consistent basis. And while that strategy seemed to work quite well for a long time, it seems that there may be a little fatigue setting in for consumers who might have previously considered such a move. This is something that auto insurance agents will certainly have to deal with, because while drivers may be getting a little sick of rising rates, they also may not want to hear a constant sales pitch.

    The share of the total number of consumers with active credit nationwide who shopped around for auto insurance last year came in at a little more than 1 in 6 (16.8 percent), according to the latest data from the TransUnion Auto Insurance Shopping Index. That number was unchanged from 2013 and down only marginally from the 16.9 percent who did the same in 2012. In other words: It looks as though growth in this area has officially hit a wall.

    Stalled out?
    That comes after a period of significant growth over four years, as the number rose steadily from 2009 to 2012, the report said. In the first of those years, only 14.4 percent – about 1 in 7 – shopped around for coverage, and that number rose to 15.5 percent in 2010, then 16.1 percent in 2011. But since then, things have been largely stuck in a rut, albeit at some of the highest levels ever seen in the market.

    “After three years of increased insurance shopping, our data show that we have plateaued with no significant changes in shopping patterns since 2012,” said Mark McElroy, executive vice president of TransUnion’s insurance business unit. “This tells us that despite the fact internet usage continues to rise, consumers are not fundamentally changing how they shop for auto insurance. Attracting new consumers in a very competitive insurance market can be difficult, and our results emphasize the need for continued innovation to attract the right consumers.”

    Price is no longer a huge driver of auto insurance shopping.Price is no longer a huge driver of auto insurance shopping.

    What about the reasons?
    Meanwhile, cost is often not a motivator in these instances, the report said. Instead, life events tend to drive these changes, and that’s especially true for people who move to new addresses; shopping prevalence doubled when a person moved to a new address.

    If price isn’t always the issue, the more insurance agents can do to educate their clients – rather than come across as trying to sell them something – the better off their relationships are likely to be. Polls show that consumers who have a strong understanding of what goes into their policies (and consequently, what they’re paying for under them) as well as a strong ongoing relationship with an agent or insurer, also tend to be more satisfied with that coverage overall. For agents, that can be a boon, because it will serve to not only keep their customer satisfaction ratings as high as possible, but also potentially bolster their retention rates, especially if people continue to reduce the amount they shop for new coverage.