These days, many consumers seem to be growing a little more anxious about how much they have to pay for their various types of necessary insurance coverage, and as such, there appears to be a lot more shopping around in the property and casualty insurance industry in particular. The most recent data shows that these companies specifically may have a bit of difficulty in retaining their customers than insurers in other sectors. As such, it might be wise for insurance agents working in this part of the industry to make sure they’re doing more to connect with customers and explain to them why they pay what they do for coverage.
In general, there are very few people entering the P&C insurance market overall every year (about a 2 percent increase in 2013), and for the most part, these consumers are very sensitive to pricing first and foremost, according to a new study from Bain and Company. For instance, there were just 1 percent new auto insurance customers, and 4 percent more home policyholders last year – and they generally chose their carriers based first on the costs they’d face, and second on the reputation of that provider.
What prompts a move?
Meanwhile, those who chose to switch carriers did so largely because they were attracted by promises of lower prices, and often, these savings don’t even have to be particularly substantial, the report said. More than half of those who moved did so because they thought they could save less than 20 percent versus their previous premiums. The estimated retention rates for consumers in general remain relatively high, though, with 88 percent of those who have no strong feelings about their providers sticking with them, and 97 percent of policyholders who have favorable views are likely to stick with their companies. Meanwhile, just 74 percent of those with negative views of their providers stuck around.
In addition to these findings, previous studies have shown that in general, consumers don’t mind paying a little more for any type of insurance as long as the customer service they receive is strong. For this reason, insurance agents should try to build better relationships with their clients as a means of improving their chances to keep them going forward. However, it might also be wise to continue looking for as much wiggle room in pricing as possible, because that, too, remains a strong way to improve customer satisfaction.