Allstate, GEICO, State Farm… where are customers going amid increased auto insurance shopping?

Allstate, GEICO, State Farm… where are customers going amid increased auto insurance shopping? | Insurance Business America

Allstate, GEICO, State Farm… where are customers going amid increased auto insurance shopping?

J.D. Power has published the latest edition of its auto insurance quarterly shopping trends report, and found that in the fourth quarter of 2022, there was actually a noticeable increase in auto insurance shopping activity in America.

The report – produced by J.D. Power in partnership with TransUnion – suggested that consumers have taken note of the historic rate increases their insurers have been making, forcing their hands to shop for better deals. For Q4 2022, the shopping rate was observed to be at 12.1%, characterized by a busy shopping month in November, which eventually cooled down by December.

According to J.D. Power, US auto insurance shopping activity during Q4 2022 was so high, that the numbers are some of the highest it has seen in the 2+ years it has been doing these reports.

Shopping for auto insurance was not the only thing that increased in the last quarter; switching rates also jumped during the period. The report found that just over 4% of auto insurance customers indicated that they switched their carriers.

J.D. Power also tracked switching trends by an insurance carrier’s largest rivals, finding the following:

Auto insurance customers from these carriers…

… switched to this carrier during Q4 2022

American Family Insurance, State Farm, Travelers

Allstate

Allstate, Progressive

GEICO

GEICO, Liberty Mutual Insurance, Nationwide, Travelers, USAA

Progressive

Farmers Insurance

State Farm

 

The report also tracked customer loyalty during the period – with “loyalty” tracked based on the percentage of customers of one carrier who were shopping from other insurers; the lower the percentage of customers buying from other carriers, the more “loyal” the customer base. The list goes:

Higher loyalty:

  1. USAA
  2. MAPFRE
  3. NJM
  4. Amica
  5. Erie

Lower loyalty:

  1. National General
  2. The Hanover
  3. Progressive
  4. COUNTRY
  5. Liberty Mutual

Interestingly, J.D. Power’s report also commented on telematics – the tech innovation many held would have solved the high-cost crisis of auto insurance. According to the report, telematics adoption appeared to stabilize and plateau in Q4 2022, despite its strong adoption earlier that year. Citing TransUnion’s data, J.D. Power pointed out that 40% of consumers who chose to have the tech installed in their vehicles saw their rates increase – this may have hindered continued adoption, the analytics firm suggested.

Another report that was also recently published by ValuePenguin lists down which US states pay the most and least for auto insurance. That report noted that Michigan, Florida, and Rhode Island are the top three states with the most expensive for full-coverage auto insurance, while Vermont, Maine, and Idaho are the top three with the cheapest.

What are your thoughts about the increase in US auto insurance shopping activity? Comment away in the section below.