Facing Modest Rate Increases, Auto Insurers Increase Reliance on Service, Agents, J.D. Power Finds

By a News Reporter-Staff News Editor at Insurance Weekly News -- - Amid a second straight year of stagnant auto insurance shopping activity and modest rate increases, auto insurance companies have grown increasingly reliant on great customer service, personalized advice and strong agents to win over their customers, according to the J.D. Power 2017 U.S. Insurance Shopping Study,SM released.

With average premiums increasing by a modest 2-3% annually, new insurance shopping rates flat and new customer acquisition rates unchanged, auto insurers are faced with the challenge of resisting commoditization. The study finds that as auto insurers struggle to compete on price, they are being forced to differentiate based on factors such as brand reputation, agent recommendations, product and service to drive new business sales. Communication remains critical, as the key performance indicator (KPI) that has the greatest influence on customer satisfaction in this year's study is ensuring that customers completely understand their coverage.

"The auto insurance industry is at an inflection point where customer patterns and behaviors are on the verge of shifting," said Greg Hoeg, vice president of U.S. insurance operations at J.D. Power. "To survive this period of price stagnation, insurers must develop strategies to be able to better differentiate not just to acquire new customers, but also to acquire customers with desirable risk profiles in order to maintain profitability."

Keywords for this news article include: J.D. Power.

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