J.D. Power and Associates Reports: The Average Auto Insurance Company Fails to Capture...

J.D. Power and Associates Reports: The Average Auto Insurance Company Fails to
Capture 98 out of Every 100 Shoppers

WESTLAKE VILLAGE, Calif., Sept. 16 /PRNewswire/ -- On average, auto
insurance companies quote and successfully sign only 2 percent of all auto
insurance shoppers, according to the J.D. Power and Associates 2008 Insurance
Escaped Shopper Study(SM) released today.
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The inaugural study examines the behaviors of auto insurance customers who
recently shopped for a new insurance company. The study, which aims to better
understand why shoppers either avoided, ignored or considered but did not
purchase from insurance companies, also profiles 26 of the largest personal
auto insurers in the United States.
"While it is surprising to learn that most auto insurance companies only
capture 2 percent of shoppers, the reality is that the majority of shoppers in
the market are either unaware of a particular insurance company or choose to
ignore them for one reason or another," said Jeremy Bowler, senior director of
the insurance practice at J.D. Power and Associates. "Unwillingness to
consider a brand is generally caused by a previous experience with a company,
a lack of bundled or desired options, or feedback from friends and family. In
particular, the impact of recommendations and referrals is critical to whether
or not a prospective customer will even consider an insurance company."
The study finds that 36 percent of auto insurance customers have actively
shopped for a new insurer in the past year. On average, 38 percent of shoppers
do not recognize various insurance companies examined in the study, while an
additional 39 percent of shoppers ignore certain companies during their
shopping process, completely excluding them from their consideration set.
Additionally, 6 percent of shoppers avoid the average insurance company and
indicate that they would never consider them for their insurance needs.
Overall, only 18 percent of prospective customers consider any given insurance
company when they shop.
"What's most significant is that less than one-half of all shoppers who
investigate or research an insurance company never ask for a quote," said
Bowler. "Since most insurance companies only gather personal information as
part of the quote process, they have a very narrow view of the marketplace.
Insurers have no way to measure how many more prospects escaped earlier in the
shopping process -- whether they were driven away by a cumbersome quote
process, a non-responsive agent or misconceptions about price or service
quality."
The study also finds that most prospective customers who consider an
insurance company but do not request a quote gather information via the
Internet, with more than 60 percent visiting the insurance company's Web site
or responding to an Internet advertisement or blog posting. Insurance
companies lose more prospective customers, on average, through the Web channel
compared with telephone and in-person sales channels. In fact, traditional
phone and in-person sales channels achieve a 52 percent close rate, on
average,
while online channels successfully close sales less than 20 percent of the
time.
"One interesting competitive tactic being implemented in the industry is
for one insurer to offer quotes for multiple competitors," said Bowler. "One
in three shoppers who receive a competitor quote from the company they are
currently investigating don't bother to call or visit that competing company
directly to obtain a real quote from them. This suggests that those insurance
companies who implement this strategy are successfully directing shoppers away
from their competition before these competitors even know they were being
considered by a consumer."
The 2008 Insurance Escaped Shopper Study is based on responses from more
than 8,400 auto insurance shoppers. The study was fielded in April 2008.
About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is a
global marketing information services company operating in key business
sectors including market research, forecasting, performance improvement,
training and customer satisfaction. The company's quality and satisfaction
measurements are based on responses from millions of consumers annually. For
more information on car reviews and ratings, car insurance, health insurance,
cell phone ratings, and more, please visit JDPower.com. J.D. Power and
Associates is a business unit of The McGraw-Hill Companies.
About The McGraw-Hill Companies
Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a leading global
information services provider meeting worldwide needs in the financial
services, education and business information markets through leading brands
such as Standard & Poor's, McGraw-Hill Education, BusinessWeek and J.D. Power
and Associates. The Corporation has more than 280 offices in 40 countries.
Sales in 2007 were $6.8 billion. Additional information is available at
http://www.mcgraw-hill.com.
Media Relations Contacts:
Jeff Perlman John Tews
Brandware Public Relations J.D. Power and Associates
Los Angeles, Calif. Troy, Mich.
(818) 317-3070 (248) 312-4119
jperlman@brandwaregroup.com john.tews@jdpa.com

No advertising or other promotional use can be made of the information in
this release without the express prior written consent of J.D. Power and
Associates. http://www.jdpower.com/corporate
SOURCE J.D. Power and Associates

Jeff Perlman of Brandware Public Relations, Los Angeles, Calif.,
+1-818-317-3070, jperlman@brandwaregroup.com, for J.D. Power and Associates;
or John Tews of J.D. Power and Associates, Troy, Mich., +1-248-312-4119,
john.tews@jdpa.com