If your company is a leader when it comes to online shopping, then the chances are good that you’re also seeing premium growth, according to the J.D. Power 2016 U.S. Insurance Shopping Study.

The study measured auto insurance shopping, purchase behavior and satisfaction for customers who had recently purchased insurance online. Satisfaction was determined by price, distribution channel and policy offerings.

SNL Financial found that direct premiums written for the personal lines and auto markets increased 4.7% in 2015 to $199 billion, with growth attributed to new business created by direct writers. “Direct writers have invested heavily in digital channels to increase the functionality and ease of using their websites, which has clearly created an advantage for direct distribution relative to traditional agency distribution in some respects and has supported agency distribution in others,” said Greg Hoeg, vice president of U.S. insurance operations at J.D. Power.

Online shopping continues to be popular as 74% of consumers looking to purchase insurance use websites or aggregators to obtain quotes and gather information. Of the nearly half of the customers obtaining online quotes, 25% actually purchased insurance online, 50% preferred to use an agent and 22% utilized the company’s call center.

To provide online buyers with additional support, many companies provide the opportunity to talk “virtually” with an agent or company representative.

“While many customers want to shop online, they often still want to talk to someone when they buy their insurance to make sure they are getting the right coverage or have questions about their policy answered,” said Hoeg. “Maintaining a competitive advantage in digital capabilities through websites and mobile applications is critical. Insurers need to focus on the delicate balance of providing an easy shopping experience while providing product differential and professional service.”

Interestingly, fewer consumers are shopping for a new insurer in 2016, and of those looking, only 30% actually change insurers. Those who made the switch saved an average of $356 on their annual premium, a drop of $32 from the savings buyers who changed insurers in 2015 experienced.

Total satisfaction with the online purchase experience also dropped from 833 in 2015 to 826 in 2016 based on a 1,000-point scale. Gen X, Gen Y and pre-Boomers are the most likely online shoppers.

Ranking highest in customer satisfaction for the online purchase experience were Erie Insurance and Liberty Mutual, which were tied with a score of 853. This was the fourth year in a row that Erie held the No. 1 position. Following closely behind were the Hartford (850), American Family (845) and Automobile Group (840).

The study results were based on responses from more than 17,000 consumers who requested a price quote from an insurer in the past nine months.

See how insurance companies ranked in the J.D. Power study:

(Click on graphic to enlarge.)

Special Reports /

Insurer customer satisfaction tied to online buying experience

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