ATLANTA, Sept. 10, 2019 /PRNewswire/ -- Drivers are
shopping and switching auto insurance policies more than ever.
Recent analysis of the U.S. auto insurance market by LexisNexis®
Risk Solutions has revealed as much as 62% of policies are shopped
off-cycle or outside the traditional renewal window. This increase
in shopping activity can be credited in large part to how easy it
is to shop insurance using carriers' price comparison tools, mobile
apps and websites that prepopulate with consumer data. With
consumers empowered to shop for a better deal, it's no surprise
that 40% of U.S. auto insurance policies were shopped in the past
year.
"Over the past decade, LexisNexis Risk Solutions has tracked
auto insurance shopping behaviors. We've seen growth in the volume
of consumers shopping their auto policies quarter, year-over-year,"
said Adam Pichon, Vice President and
General Manager, Auto Insurance, LexisNexis Risk Solutions. "If
carriers don't identify these behaviors and adapt their strategy to
address these shopping and switching patterns, then they will
struggle to retain their customer base."
To complement LexisNexis Risk Solutions proprietary market
insights, the company recently commissioned a national study of
over two thousand auto insurance policyholders in order to better
determine motivations for why consumers are shopping. The study
respondents were classified into three categories based on their
auto insurance shopping habits over the past year – recent
non-shoppers, shoppers and switchers. The study found that half of
those surveyed have shopped in the past year and one-in-five ended
up switching carriers. While there were no significant demographic
differences between the respondent groups surveyed for the study,
there were shopping differences in how they research and purchase
insurance.
Shopping Habits During Renewal Windows
The study also
found that 72% of consumers are aware that they can shop and switch
their insurance carrier at any time, supporting what LexisNexis
Risk Solutions witnesses in actual shopping behavior – 62% of
consumer shopping off-cycle. Recent non-shoppers are most likely to
renew automatically with 38% reporting they renew immediately when
they get their renewal notice, and 27% saying they do so with
little or no policy review. Shoppers on the other hand, are more
likely to take their time, research their options and renew within
30 days of receiving their renewal notice. The vast majority of
respondents, 70%, review both their price and coverage before
renewing, which reveals that shoppers are highly engaged.
Price is King and Tops Loyalty
When it comes to
insurance shopping, price was cited as the number one reason
consumers decided to switch insurance carriers. And the price
difference doesn't have to be significant; a savings of
$100 or less was enough to
incentivize 45% of all switchers across income levels. Even if a
carrier offers a competitive price this year, it doesn't mean the
customer will remain loyal. Half of shoppers in the study told us
that they expect to shop again in the next year with one-in-five
expecting to switch carriers when they do
shop.
"Given the competitive market, how can carriers retain their
current customer base? Proactively anticipating upcoming life
events can prove to be a key differentiator," said Ian Griffin, Director, Acquisition &
Retention, LexisNexis Risk Solutions. "Communicating with customers
at the appropriate time with the right information is key to
further strengthening customer loyalty."
Carriers Need to Anticipate That Life
Happens
According to the study, more than 60% of shoppers
experienced a life event within the past year and, of that group,
half claimed it affected their decision to shop their auto
insurance. Life events that generally have the most influence on
auto insurance shopping include: adding or removing a driver,
buying or leasing a new vehicle, decreasing household income,
buying a new house, getting married or divorced, and moving.
While price is a primary motivation for consumers to shop and
switch, carriers have an opportunity to use what they know about a
customer's life events to proactively engage and retain valuable
customers before they shop. With 65% of consumers expecting a life
event to occur within the next one to two years, now is the time
for carriers to review their book of business and proactively
monitor and anticipate when customers are most likely actively
shopping.
For more information, download the LexisNexis Insurance
Shopology white paper.
About LexisNexis Risk Solutions
LexisNexis® Risk
Solutions harnesses the power of data and advanced analytics to
provide insights that help businesses and governmental entities
reduce risk and improve decisions to benefit people around the
globe. We provide data and technology solutions for a wide range of
industries including insurance, financial services, healthcare and
government. Headquartered in metro Atlanta, Georgia, we have offices throughout
the world and are part of RELX (LSE: REL/NYSE: RELX), a global
provider of information and analytics for professional and business
customers across industries. For more information, please visit
www.risk.lexisnexis.com, and www.relx.com.
Media Contacts:
Rocio
Rivera
LexisNexis Risk Solutions
Phone: +1.678.694.2338
rocio.rivera@lexisnexisrisk.com
Mollie Holman
Brodeur Partners for LexisNexis Risk Solutions
Phone: +1.646.746.5611
mholman@brodeur.com
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SOURCE LexisNexis Risk Solutions