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More Auto Insurance Buyers Want to Close Policies Online: J.D. Power

The company's 2012 U.S. Insurance Shopping Study finds that when people shop for a new carrier, the ability to buy a final policy online is a big differentiator.

There are fewer auto policyholders shopping around for new insurance carriers, but those that do are more apt to make a change, and they expect to be able to do so online. That's according to J.D. Power & Associates' recent 2012 U.S. Insurance Shopping Study, which surveyed 16,100 shoppers who requested an auto insurance price quote from at least one competitive insurer within a year of data collection.

"Last year, we saw the shopping rate at 33%. This year that shrunk to 25%, but 43% of those changed insurers" compared to about 40% last year, says Mark Garrett, a Troy, Mich.-based research director in J.D. Power & Associates' insurance practice.

With retention and satisfaction with insurers at high levels, many of the people who are simple "price checking" are taken out of the market, Garrett says. However, of those who are looking to switch, 34% are looking to complete the process, from quoting to closing, entirely online. This number is up from last year, and increasingly correlates to success in customer acquisition.

"GEICO's closing about 28% of the business that starts online, and State Farm is only about 9%," Garrett says, explaining that State Farm's goal is more often to send prospects from the online channel to the agent channel.

"We're proposing that they're losing that business," he adds. "When you look at people who switch insurance carriers, they're switching to a company that will let them close online."

In fact, GEICO gets half of all the business from respondents who want to start and end the process online, speaking to their reputation in the market, according to Garrett.

"Having a useful website, easy to navigate, that's a real differentiator," he says.

What makes a top-notch online quoting experience? Check out 6 examples, including Allstate, GEICO, and The Hartford, and reasons they succeed — or don't.

Illustrating the shift in shopper preferences, the amount of people who wanted a completely offline process remained flat year-over-year, J.D. Power research found. It's "mixed quoting" — going to a website for one insurer, but calling another's agent — that is flattening out. This indicates where the market is going as it matures, Garrett says.

"A lot of those traditional agency-based carriers have to figure out a way to adapt to that consumer right now," he says, noting that using the web as a way to gather leads for agents "is not really successful. It's a short-term process to get these people in the door."

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio

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