Auto Insurance — Consumers Not that Loyal These Days

The 2025 US Auto Insurance Trends Report from LexisNexis Risk Solutions is showing something most of us already know. Policy shopping and changing providers is at record levels.

It’s been growing for several years but in the past year those changes are been pushed forward by consumers more focused on their premium costs, the aggressive marketing by insurers and the convenience of digital shopping and purchasing.

Here are some conclusions of the survey:

• There was record volume of shopping and switching insurers in 2024
• Consumers are very actively looking for better rates
• It’s very easy to shop online these days
• Shopping online eliminates the traditional hassle of changing insurers
• To counter, insurers are offering loyalty discounts, putting together better bundling offers and pumping up customer service

“Insurers must embrace advanced analytics and customer-centric innovation to navigate this dynamic market,” the report suggests. “Personalized pricing models, real-time quote adjustments, and digital engagement will be critical differentiators in retaining and acquiring customers.”

Generation Z — people age 18 to 26 — are doing the most shopping and switching. The most loyal consumers are baby boomers. Here’s the generational breakdown:

Gen Z — age 18 to 26:

• They are the most active shoppers
• They do the most switching
• Over 80% of Gen Z used mobile or online platforms to compare quotes
• They are very sensitive to even the smallest premium changes
• Many will change insurers after just one price increase
• They are the least loyal of all the age groups

Millennials — age 27 to 42:

• They are a close 2nd to Gen Z in policy switches
• Life changes like families, new homes, jobs etc. push the switching
• They are super tech savvy and use digital tools to research and purchase
• However, they also love good customer service — online or in person
• The more an insurer can — or will — bundle, they more like the insurer

Gen X — age 43 to 58:

• They’re more stable insureds and more loyal
• However, 2024 saw a big increase in those shopping and switching
• They will stay with an insurer if the value of staying offsets prices
• They love bundling discounts and this is a good strategy to retain them

Baby Boomers — age 59 to 77:

• They are the least likely to switch and remain very loyal to their insurer
• They are most likely to go through agents or call centers rather than online
• They’ll tolerate premium increases longer than the other groups
• However, a large increase will send them shopping

Other parts of the survey:

High-risk drivers:

• They frequently switch carriers especially after filing a claim or getting a violation
• They rely deeply on aggregation to find affordable insurance options

Families and multi-car households:

• They love bundling and multi-policy discounts
• Shopping is usually pushed by life changes like teenage drivers or buying a new vehicle

Urban vs. rural:

• Urban consumers shop more often and change insurers more often
• They are also exposed to more aggressive digital advertising
• Rural consumers have lower switching rates
• They love working with agents instead of online
• They often have fewer insurance options

Source link: Insurance Business America — https://bit.ly/4kFNToU