NU Online News Service, June 23, 3:45 p.m. EDT
New insurance purchasers ranked Erie Insurance highest in satisfaction for the second consecutive year, according to the new J.D. Power and Associates 2009 Insurance Shopping Study.
The J.D. Power survey also found fewer consumers are shopping for auto insurance, and insurers have retained 90 percent of their customers.
According to the study, 28 percent of consumers shopped their coverage, compared to 36 percent in 2008′s study. Eighteen percent shopped and retained their existing insurer, while 10 percent shopped and switched.
Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates, said consumers' "hunker-down" mentality in the recession may be partly responsible.
"Most customers would prefer to hold tight to their current provider, which they already know, rather than risk trying a new provider, particularly amid negative coverage surrounding a number of insurance providers recently," he said.
While those that have shopped cited price as the most popular reason, the study revealed that not all shoppers automatically chose the insurer offering the lowest rate.
"Shoppers don't always go with the insurer providing the lowest quote–10 percent of shoppers say they did not purchase from the brand that offered the lowest price among the quotes they received," said Mr. Bowler. "While price may catch the attention of potential insurance customers, low prices alone won't retain customers in the long run without a high level of service."
Among customers who mentioned price as a shopping trigger, 66 percent said they just wanted to see if they were getting the best price, 25 percent cited an actual price increase, and 5 percent said they shopped because they received an unsolicited offer from another insurer, J.D. Power and Associates said.
More than one-third of customers who shopped because of price ultimately switched insurers.
Regarding consumer responses on individual insurers, the study shows that for the second consecutive year, Erie, Pa.-based Erie Insurance scored highest, racking up 893 on a 1,000 point scale, and performed well across the three factors used to calculate satisfaction–the distribution channel, price and policy offerings. The firm offers, auto, life, home and business coverage.
Madison, Wisconsin-based American Family Insurance scored second with 891; The Hartford ranked third at 889; and GEICO finished fourth at 886.
Consumer responses varied, Mr. Bowler said, depending on the distribution channel favored. He noted that Erie and American Family, for example, sell primarily through local market insurance agents, while The Hartford has a strong call center and GEICO has its Web site.
"For customers to be especially satisfied with their insurer during the shopping experience, it's important for them to think about how they prefer to be served–by a local agent, a centralized call center, a Web site, or some combination of these three channels," said Mr. Bowler. "Depending on the channel favored by the customer, one insurer may be a better choice than others based on their strength in that particular channel."
In descending order, Auto-Owners, ACG, Allstate, Amica Mutual, State Farm, Nationwide, CSAA and Liberty Mutual all scored above the industry average score of 865.
USAA, which was not included in the rankings since it provides coverage only to U.S. military personnel and their families, scored 918, higher than any other insurer.
The complete J.D. Power rankings are online at::
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