A survey of auto insurance customers provides goodnews for insurance agents—and serves as a reality check forcarriers who believe price should be the major focusof marketing campaigns.

In its “2012 Auto Insurance Customer Insights Research—Winning Share andCustomer Loyalty in Auto Insurance,” consulting firm McKinseysurveyed over 17,000 people in what the firm's Principal TanguyCatlin describes as “the most comprehensive market research on[auto] insurance in the U.S.”

Looking deep into the numbers, Catlin says, there is a consumersegment with no loyalty to their insurers. Insurancecompanies spend too much time and money trying to retain them,he adds. Instead, to improve retentions insurers should focuson increasing customer satisfaction and engaging clients more,Catlin says.

Catlin says the survey results strongly indicate direct channelsare becoming a dominate force in marketing insurance, a realitysome insurers fail to acknowledge. Equally important, to improveretentions, insurers need to “move away from the traditionaldemographic view” about price and understand what motivatescustomer loyalty.

The number of consumers shopping for a new carrier dropped tothe lowest level since 2008. Over the last 12 months, 27percent of consumers shopped for a new carrier and only 9percent switched.

The triggers for change are price increases (48 percent), lifeevents such as moving to a new state or changing jobs (44 percent)and new coverage needs (32 percent). The survey allows for multipletriggers to apply.

On retention and customer loyalty, those that remain aresplit into two camps—either they are satisfied with their carriersor they remain for financial reasons, Catlin adds.

Customers whose auto policies were bundled with another policyimproved retention. For instance, the survey says, 49 percent ofauto policies bundled with a homeowners policy halved the number ofcustomers who shopped and switched rates.

When it comes to shopping for insurance, the majority ofbuyers—more than 80 percent—turn to direct channels to gatherinformation and quotes. Seventy-three percent of those surveyed saythey gather insurance information on theInternet. Twenty-three percent gathered information by bothdirect and agent contacts. Others used call centers alone or incombination with the internet. A large majority ofbuyers, 70 percent, use direct channels to get quotes.

However, when buying insurance, 65 percent of consumers—whetherrenewing or shopping new—purchased their insurance through anagent. The majority, 45 percent, used an exclusive agent and 20percent an independent agent. The remainder used directchannels—call center or online.