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Consumer Study: Insurance Customers Loyal, Unless Service Fails

A new study finds that insurance customers are very loyal, but are also very likely to switch if they don't like the service they receive....
November 18, 2008

A new study finds that insurance customers are very loyal, but are also very likely to switch if they don't like the service they receive. The J.D. Power and Associates' Insurance Shopping Survey reports that the industry enjoys a 90% retention rate - extremely high when compared with other industries. At the same time, the global marketing information services firm also reports a high switch rate if insurers fail to provide good customer service.

The majority of consumers report they shop both online and offline for insurance. The largest number of consumers shopping exclusively online is in the 18-to-34 age cohort. When shopping online, the majority investigates seven brands but only requests quotes from three to four companies. The survey also found that 64% of respondents did not shop for insurance last year. More than a quarter of all policyholders obtained at least one competitive quote in the past 12 months. Respondents reported spending an average of three days shopping. More than half in the study shopped for multiple products. These customers are most likely to switch. Consumers shopping triggers are circumstance, change and price.

Jeremy Bowler, the firm's senior director of insurance practice, said the 90 percent retention rate is "ridiculously high." In comparison, the very best automotive brand, like a GM, considers holding onto six out of 10 customers a dream, he said. However, insurers shouldn't get complacent.

Insurance Customers Are Loyal Unless Service Fails (BestWire 11/17/08)

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