Price has become the leading factor influencing whether consumers switch or remain with their auto insurance carriers, according to a new study by LexisNexis Risk Solutions.
The survey of 3,000 U.S. auto insurance consumers found that 72% of those who shopped for coverage were open to switching insurers, while 86% of consumers who changed carriers cited price as a reason.
The findings were published in the company’s U.S. Auto Insurance Shopping and Switching Research Report, which examines how insurance costs, shopping behavior and bundling influence consumer decisions.
Among consumers willing to switch insurers, 17% were specifically looking for a new insurance company. The study also found that 87% of shoppers said the shopping experience either met their expectations or was easier than expected.
Jeff Batiste, senior vice president and general manager of auto and home at LexisNexis Risk Solutions, said consumers increasingly view auto insurance as an ongoing comparison of prices and value rather than simply renewing their existing policies.
The research suggests that customer loyalty may be weakening as policyholders become more comfortable comparing insurance options.
Among consumers who switched carriers within the past year, 89% said they would likely shop again if their premiums increased, while 96% said they would likely change insurers.
The study also found that bundling auto insurance with other policies may no longer provide the same level of customer retention.
Of consumers who had bundled auto coverage, 40% were open to separating their policies or were actively considering doing so while shopping. Approximately one-third of both bundled and non-bundled policyholders switched insurers.
Insurance costs are also influencing vehicle purchasing decisions. More than half of respondents (56%) said they would definitely consider insurance expenses when evaluating the total cost of owning a vehicle, second only to monthly car payments at 63%.
Premium increases remain a major reason consumers shop for coverage. According to the study, 70% identified an auto- or insurance-related event as their primary shopping trigger, compared with 24% who cited a personal life event.
Nearly half of respondents (49%) said an actual or anticipated premium increase influenced their decision to shop.
Brad Hames, vice president of insurance acquisition and retention solutions at LexisNexis Risk Solutions, said insurers need to identify changing shopping patterns and respond more effectively to customer needs rather than relying solely on traditional renewal strategies.
The findings highlight the growing importance of competitive pricing, coverage comparisons and customer retention strategies for insurance carriers and independent agencies as consumers become more willing to explore alternative coverage options.
Information for this article was provided by LexisNexis Risk Solutions. Views and claims expressed in this article are those of the source company and do not necessarily reflect the views of AgencyEquity.com. This article may have been edited with the help of AI.
