Gen X, Y Insurance Buyers Fickle: Survey

He said the information for the survey was obtained from questionnaires returned by 13,900 households. In 2004, he said, 32 percent of respondents said they had shopped for insurance.

J.D. Power's survey found the younger auto owners are also more susceptible to competitor advertising messages and peer pressure in choosing insurance.

"Generations X and Y represent a sizable chunk of the driving population, have significant buying muscle, and are savvy and informed consumers," said Kevin Keegan, executive director of J.D. Power and Associates.

According to Mr. Keegan the two generations are emerging "as the next important market for the auto insurance industry, and their unique expectations and requirements must be understood and addressed."

The study found that Gen X and Y consumers rival baby-boomers in brand awareness and purchasing power and are more likely to experience significant financial and geographical changes, leading them to reconsider their automobile coverage options.

J.D. Power said in the past year alone, approximately 40 percent of Gen X consumers have recently moved, 33 percent have accepted a new job, and many are marrying and building families.

The company noted that younger insurance buyers are also by definition newer drivers who have less-developed relationships with insurance carriers and are more open to switching providers.

"Nearly one-third of younger consumers have shopped for auto insurance in the past year," says Keegan. "They have less brand loyalty, and are more prone to change."

Typified by more than just deep pockets and brand fickleness, Gen X and Y consumers were also found to be more technologically savvy and more apt to rely on the Internet for research and shopping.

Mr. Bowler said that 60 percent of the consumers who plan to shop for insurance said they would use the Internet as a component.

The X and Y group, he said, are very critical of service quality and demand a response time of minutes rather than hours. If he were to advise an agent-based firm how to compete for their business, Mr. Bowler said he would suggest that the company provide "24/7 access to infrastructure for the agency.

According to the study, X and Y types are swayed more easily by online advertising messages from competitive providers, such as Internet pop-ups and text messages, and by the opinions of peers, friends, relatives and co-workers.

However, Mr. Bowler said even though there is a generally high level of consumer satisfaction with insurance, when compared with other industries, the sector does not get much in the way of customer referrals the way manufacturers of cars and other goods do.

Younger drivers were described by the study as more proactive in seeking information and preferring to initiate contact with providers on their own and through direct channels, such as personal phone calls and provider Web sites.

Gen X and Y drivers were also found to be more critical and demanding than other age groups, particularly in client relations. Their expectations of personal attention, rapid problem-solving and alternative communication channels were reported to be substantially higher than those of previous generations.

Based on this generational profile, J.D. Power's study suggests marketing strategies to retain Gen X and Y clients and prevent brand-switching.

The report states, for example, that younger consumers are more comfortable answering questions or lodging complaints through the Web and automated phone systems, and prefer to pay bills monthly or quarterly, rather than the entire policy at renewal.

"Positive interactions with clients, timely responses to customer questions, and more proactive client services are all excellent strategies to reach and retain these younger policyholders," said Mr. Keegan.

The study also advises boosting Internet and text-message advertising, more phone and Web contact, and other policyholder benefits.