NEW YORK--Forget brand loyalty--for insurance customers price iseverything, according to a new study unveiled here today.

That finding was among others in the inaugural "2007 WorldInsurance Report" produced by Capgemini, a global consultingfirm.

John Mullen, vice president of insurance for Capgemini, saidinsurers in the United States do not understand what it takes tokeep their customers loyal to their brand.

"Price sensitivity is the number one reason for the selection ofan insurance product," said Mr. Mullen.

Capgemini's report exploring the relationship between consumersand carriers surveyed 10,000 customers, 350 carriers and 50insurance executives throughout the world. It found there issignificant disconnect between the expectations of the personallines consumer and the carriers trying to retain theirbusiness.

Over a five-year period, 31 percent of property-casualtyinsurance customers will switch insurers, while the figure is only9 percent in the life sector.

The numbers are in contrast to the United Kingdom where theturnover rate is 63 percent and products are highlycommoditized.

Mr. Mullen said as insurers increasingly commoditize theirproduct they run the risk of the turnover rate equaling the UnitedKingdom model, especially as a new generation of consumers findsother avenues outside of the traditional agent relationship fortheir insurance purchase.

While brand and trust of the insurance product are high on thelist, he said, the number one concern consumers have when choosinginsurance is price.

The results of the survey indicate insurers do not understandtheir customers and have a lot of work to do to retain customerloyalty.

Part of the problem, said Mr. Mullen, is that insurance productsare not intertwined closely with one another, making it easy forthe consumer to sever parts of that relationship as they shoparound for the best price. However, insurers believe otherwise.

The fact that insurers do not have a constant relationship withtheir customers, only in contact with them during renewal and forclaims, is part of the reason consumers do not develop a brandloyalty. He added that "customer satisfaction does not equalcustomer loyalty."

"The answer is not to bombard the customer with mailings but tounderstand what is important to the consumer and to arm theproducer with information to make the connection," he said.

To accomplish this, insurers need to figure out the rules ofengagement, he pointed out, and spend the kind of money needed "toget closer to what the customer and agent need to besuccessful."

One critical point, he said, was for insurers to stop spendingmoney on their legacy systems and start developing the kind oftechnology that will make it easier for both agents and customersto do business with them.

Also on hand was Joseph J. Annotti, senior vice president,public affairs for the Property Casualty Insurers Association ofAmerica based in Des Plaines, Ill.

He said when it comes to insurers improving their image therewill be no one single publicity campaign to achieve the desiredresult. The industry is too diverse and deals with too many issuesfor a single message to work.

"It will be up to each company to manage their reputation," Mr.Annotti said.

Insurers, he continued, need to reject the jargon of theindustry and explain their actions in terms that consumersunderstand and can relate to.

"It is not about us all the time," said Mr. Annotti about theindustry. "It is about the people who buy the product."

A copy Capgemini's report is available online atwww.capgemini.com/worldinsurancereport.