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Auto Insurance Purchases Face Decline: Study

TransUnion study shows that auto insurance shopping rates have steadily decreased since 2012.

The percentage of consumers who shop for auto insurance is on the decline, according to the TransUnion Auto Insurance Shopping Index. Survey results reveal a downward trend that began in 2012.

Shopping rates for auto insurance dropped by 3% from February 2013 through February 2014. Just 15% of the credit-active population shopped for new policies in the past year compared with 15.4% in the preceding year. From February 2011 through February 2012, 15.7% of that population shopped for auto insurance.

[ Large Insurance Companies Make Customers Wait: Study. ]

“We are finding that despite billions of dollars being spent on advertising each year, the percentage of consumers shopping for auto insurance has been dropping for approximately the last two years,” says Mark McElroy, EVP of TransUnion’s insurance business unit, in a statement. “This places additional pressure on insurance carriers as their pool of potential customers declines.”

Although overall shopping rates are on the decline, the study revealed two peak seasons in March and August. Experts hypothesize that the early spring increase is due to purchases made with work or tax return cash inflows received early in the year, and the late summer shopping a result of back-to-school auto purchases.

Kelly Sheridan is Associate Editor at Dark Reading. She started her career in business tech journalism at Insurance & Technology and most recently reported for InformationWeek, where she covered Microsoft and business IT. Sheridan earned her BA at Villanova University. View Full Bio

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User Rank: Author
5/19/2014 | 3:16:01 PM
re: Auto Insurance Purchases Face Decline: Study
Interesting ideas here, and you touch on some critical issues that insurers will face. The quotes you mention highlight the growing importance of customer experience - people value good service and are willing to pay for it. Companies known for fair pricing and excellent service, such as Amazon, could prove a threat to today's insurers.
User Rank: Moderator
5/18/2014 | 3:57:12 PM
re: Auto Insurance Purchases Face Decline: Study
Kelly, Nate,
Through my research I find that the general "stickiness" continues to be generated by the experience of the consumer.
To that end; Renewal requirements (application), billing flexibility, and changes to the policy are hyper-critical (well,..... maybe just important). The truth is, most people do not want to have to think about their insurance. It is a necessity, so - make it easy for me and I will stay with you.
Two faint ringing sounds in the distance:
- Heard in a conference room full of insurance executives "...I'd buy insurance from Amazon..." "...I think I trust them to get me a good price, plus resolve a complaint..."
- Heard from millennials - a few times: "...really, they make it easy. I may not be paying the lowest amount, but the billing and renewal is easy..."

That is out there but look for risk transfer and financial management to combine new apps on mobile tools. There you may see some very interesting shifts.
Nathan Golia
Nathan Golia,
User Rank: Author
5/14/2014 | 7:23:28 PM
re: Auto Insurance Purchases Face Decline: Study
If auto rates have bottomed out, a lot of the incentive to switch goes away since you probably aren't geting a discount with the next guy. Maybethat's finally happening.
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