Although Satisfaction is Higher When a Local Agent is Involved, More Buyers are Purchasing New Policies via Direct Channels WESTLAKE VILLAGE, Calif., July 10
WESTLAKE VILLAGE, Calif., July 10 /PRNewswire/ -- Erie ranks highest among
18 major auto insurance companies in satisfying new buyers with the purchase
experience, according to the J.D. Power and Associates 2008 Insurance New
Buyer Study(SM) released today.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050527/LAF028LOGO-a)
The study examines the purchase behaviors and overall satisfaction of
buyers who shop for a new auto insurance company. Three key factors are
measured to determine overall satisfaction. In order of importance, they are:
distribution channel (50%), price (29%) and policy offerings (21%).
Erie ranks highest in the study with a score of 896 on a 1,000-point scale,
performing particularly well in the price factor. The Hartford closely follows
Erie in the rankings (894), while State Farm ranks third overall (893). State
Farm performs particularly well in both the distribution channel and policy
offerings factors. USAA, a financial services provider open only to the U.S.
military community and their families, and therefore not included in the
rankings, also achieves a high level of customer satisfaction.
"The shopping experience is the first opportunity that an insurer has to
meet or exceed the expectations of prospective buyers," said Jeremy Bowler,
senior director of the insurance practice at J.D. Power and Associates. "The
growing convenience of obtaining quotes, particularly online, makes shopping
and switching increasingly simple. As a result, insurers who disappoint buyers
during the shopping and sales process run the risk of losing sales from
potential new customers and of losing renewals from existing customers."
The study finds that while 55 percent of all new auto insurance sales are
handled by local agents, the percentage of buyers shopping and closing via
direct channels -- which includes insurer Web sites and call centers -- has
increased from the 2007 study. In 2008, 44 percent of buyers who bought auto
insurance from a new insurer purchased directly from the insurer, rather than
through an agent -- an increase of 3 percentage points from 2007. Additionally,
among buyers who changed their shopping channel, more buyers changed to direct
purchasing methods (22%) compared with those who switched to using an agent
(15%).
"The study results indicate that a growing number of insurance shoppers
are buying auto insurance online," said Bowler. "In 2008, sales transactions
processed entirely on the Web now account for 21 percent of all new-customer
insurance sales."
However, the study finds that buyers who purchase their auto insurance
policies through local agents give significantly higher average satisfaction
scores compared with those who purchase policies from call center
representatives or via Internet channels.
"Buyers who use insurance agents are also more likely to purchase bundled
auto and homeowner insurance policies," said Bowler. "Despite this trend,
insurance providers are steadily enhancing their Web sites capabilities, and
shopping through a direct channel certainly has its benefits for prospective
buyers, as most cite the ease of conducting business as a primary reason for
shopping and purchasing direct. As direct channels are steadily enhanced, the
challenge for insurers is to accommodate buyers seeking more complex insurance
bundles in order to potentially increase close rates via the Web."
The study also finds the following insurance buying trends:
-- The rate of switching insurers has increased-up from 33 percent in 2007
to 39 percent in 2008.
-- Fourteen percent of customers initiated the shopping process because of
a poor customer service experience. Among them, 73 percent switched insurers,
which emphasizes the importance of delivering good customer service.
-- In the past 12 months, 36 percent of customers requested an insurance
quote, marking a 5 percent increase from 2007.
-- Serial shoppers, defined as those customers who have shopped three or
more times for auto insurance in the past three years, represent slightly less
than one-third of all auto policy shoppers.
-- While the average insurer will close 18 percent of their quotes, close
rates range from 9 percent to 38 percent among insurers profiled in the study.
The 2008 Insurance New Buyer Study is based on responses from 8,452
consumers who requested an auto insurance price quote from at least one
competitive insurer in the past 12 months and includes evaluations of 17,677
unique carrier quotes. The study was fielded in April 2008. To download a copy
of the 2008 Insurance New Buyer Study Management Discussion, go to:
http://www.jdpower.com/corporate/library/download/?files=9998902. To view a
video on the 2008 Insurance New Buyer Study, go to:
http://www.jdpower.com/corporate/news/releases/pressrelease.aspx?ID=2008084.
Customer Satisfaction Index Ranking
Based on a 1,000-point scale
Insurance ProviderOverall Satisfaction Score Power Circle Rating
Erie 896 5
The Hartford 894 5
State Farm 893 5
Liberty Mutual 886 4
American Family880 4
GEICO 876 4
Nationwide 875 3
MetLife873 3
Automobile Club Group 867 3
Industry Average 867 3
Allstate 863 3
Esurance 860 3
Safeco 855 3
Travelers 855 3
Farmers849 2
Progressive844 2
AIG840 2
Mercury835 2
Automobile Club of Southern
California808 2
*USAA 922 5
*USAA is an insurance provider open only to U.S. military personnel and
their families and therefore is not included in the rankings.
Included in the study but not ranked due to small sample size are: Amica
Mutual, Auto-Owners, California State Automobile Association, COUNTRY,
Encompass and GMAC.
About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is a
global marketing information services company operating in key business
sectors including market research, forecasting, performance improvement,
training and customer satisfaction. The company's quality and satisfaction
measurements are based on responses from millions of consumers annually. For
more information on car reviews and ratings, car insurance, health insurance,
cell phone ratings, and more, please visit JDPower.com. J.D. Power and
Associates is a business unit of The McGraw-Hill Companies.
About The McGraw-Hill Companies
Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a leading global
information services provider meeting worldwide needs in the financial
services, education and business information markets through leading brands
such as Standard & Poor's, McGraw-Hill Education, BusinessWeek and J.D. Power
and Associates. The Corporation has more than 280 offices in 40 countries.
Sales in 2007 were $6.8 billion. Additional information is available at
http://www.mcgraw-hill.com.
Media Relations Contacts:
Jeff Perlman Syvetril Perryman
Brandware Public Relations J.D. Power and Associates
Agoura Hills, Calif. Westlake Village, Calif.
(818) 706-1915 (805) 418-8103
jperlman@brandwaregroup.com syvetril.perryman@jdpa.com
No advertising or other promotional use can be made of the information in
this release without the express prior written consent of J.D. Power and
Associates. http://www.jdpower.com/corporate
SOURCE J.D. Power and Associates
