J.D. Power: Customers are shopping for auto policies at record rates
Auto policy shopping has become more active, as the number of customers "just browsing" quotes has dropped.
Insurance customers shopped for auto policies at record rates in the first quarter of 2024 after three continuous months of decreased shopping to end 2023, according to the latest J.D. Power LIST Report.
In December 2023, the auto shopping rate settled at 11.7% before it began to tick upward to 12.1% in January, then 12.5% in February and 13.5% in March – the highest shopping rate recorded by the LIST report since the LIST series began in September 2020. Overall, the shopping rate for Q1 2024 was 12.8%.
The rate of customers who actually switched auto carriers increased, as well, from 3.6% in Q4 2023 to 3.9% in Q1 2024.
The rising quote rate was universal across all regions of the U.S., but those in the South saw the largest jump in shopping, from 13.2% in Q4 2023 to 14.4% in 2024. This also set a new record for the LIST report as the largest regional jump in shopping since the report’s inception.
Insurers with the highest rates of loyalty, based on the percentage of their auto customers who were policy shopping in Q1, were NJM, USAA, Erie, Mercury and The Hanover. The lowest loyalty rates were seen with customers from Kemper, Progressive, National General, Auto-Owners and GEICO.
Why are auto insurance customers policy shopping?
According to the LIST report, when the current hard market cycle began the largest share of auto policy customers said they were shopping because they were “just browsing rates.” However, over the next eight quarters there was a shift away from those who were “just browsing,” and the main reasons shoppers cited for seeking quotes were “my rate was too high,” or “my rate recently increased (not claim related).”
That trend continued in Q1 2024, with policyholders citing their reasons for shopping as:
- 21.3%: “My rate was too high.”
- 17.1%: “Just browsing rates.”
- 14.6%: “My rate recently increased (not claim related).”
- 12.6%: “I bought/I am planning to buy a new vehicle.”
- 7.7%: “I received a renewal notice.”
The J.D. Power report notes that this shift, along with the increase in both shopping and switching rates, indicates customers are becoming more active shoppers, rather than just passively checking out their coverage options. As 2024 continues, they predict the industry will see even more growth in the number of customers who say the price of their policy was their shopping trigger, and insurers should expect to encounter more of these price-conscious shoppers.