Insurance Rates Continue to Climb

Insurance Rates Continue to Climb

Insurance rates are rising to record levels. We all know this and experience it on an almost daily basis.

A new study by J.D. Power titled the Loyalty Indicator and Shopping Trends (LIST) found that high insurance prices between the first and second quarters of this year, drove consumers to shop around at renewal time. Unfortunately, those same consumers aren’t finding a lot of relief when trying to go elsewhere.

  • *The study found an 11.8% rise in rates got people looking
  • *3.6% of those looking ended up changing insurers

Martin Ellsworth — J.D. Power’s executive managing director of global insurance intelligence — said Progressive and USAA lost the most consumers. Most switched to GEICO. He said that shows consumers are more interested in saving money than the right, and most comprehensive, coverage.

The study also points out that companies are paying close attention to the behaviors of consumers when it comes to purchasing insurance. To get them to change companies, many are offering big discounts.

Ellingsworth said that has set up a new kind of battle for the hearts — and business — of consumers.

Most insurers give you longevity discounts if you’ve been a customer for a long time. Now, companies are coming up with anti-retention discounts,” he said. “Theyll say, I’ll make it easy for you. If you’ve had insurance for 10 years or more, then we can pull you away from wherever you thought you were entrenched.’”

The report says this cost-centric shopping is driving these same consumers to usage-based policies.

Inflation drove a 33% surge in auto telematics adoption in Q1 of 2022, with the number of customers offered a policy where telematics would monitor their driving and determine rates rose from 32% to 40% — and those who opted in [to UBI] increased from 49% to 65%,” the study said.

TransUnion helped J.D. Power with the study. Michelle Jackson is a senior director there. She agreed there is a growing interest in usage-based insurance.

Consumers are shopping for lower premiums, better coverage, and superior service from their insurer,” she said. “[Nowadays] more consumers are warming to the idea of using a telematics tool to enhance safe driving, while also lowering costs.”

Source link: Digital Insurance —

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