Until recently, agents strongly defended that online auto insurance services cannot be compared to knowledgeable human beings. Ironically, very quickly people moved their transactions to the Internet. Perhaps they don’t want to deal with anyone face to face or on the phone anymore. Consumers don’t want to be pressured into buying something that is either too expensive or not needed. Actually, the key reason may well be that the digital transformation is here to offer better all-around experience and improve people’s lives.
This point has now been confirmed for the first time by a 2020 J.D. Power study that shows most motorists prefer not only to transact but interact with their car insurers through websites. Furthermore, they are happier when they receive information and services through digital channels in comparison with receiving them through agents.
It is fair to say that the trend was clear and this day has been coming. These findings will most likely have huge consequences. Companies that embrace the change and invest heavily on new technology can quickly increase market share while reliance on high street intermediary presence may lose its value. We already have many examples of such leaders in innovation winning the early bird’s share.
The study surveys over forty thousand policyholders and looks at five areas. These are billing process and policy information, claims, interaction, policy offerings and price. Here are some of the striking findings of this study;
=> Digital channels account for larger customer satisfaction. 34% of customer satisfaction comes from these outlets in the vehicle insurance industry and that is more than 33% attributed to high street presence. This has increased the overall contentment with the car insurance companies to nearly 84% in the USA. That is a pretty high number considering that people are probably harder to please lately.
Vehicle insurers have been investing large sums of money to develop sites, lead drivers over to these networks through endless advertisements and encouragements. They have also been reducing their workforce in anticipation that policyholders will start self-servicing. Finally, all those efforts seem to be paying off.
Provision of products and services have been shifting towards online in the wider economy as well. Perhaps covid quicken them. Now, there are many outlets on the web to help companies gain more customers. Automobile insurers with larger pockets can tap these resources better than most other industries. For example, Google alone drives incredible traffic through targeted advertisements and natural searches. Still, it is surprising that the shift came this fast.
=> Motorists aren’t yet wormed up to their insurers. It seems that all those satisfaction talks are relative. They are perhaps happy with the situation knowing things can get worse with a wrong choice of provider. The same survey found that only 42% of policyholders trust their car insurance companies. Furthermore, the study shows that there is a very strong correlation between trust and fulfilment. A 1% increase in the trust score correlates to about 1.2% increase in satisfaction. So, there is still plenty of work to do to win them over more convincingly.
=> Policyholder loyalties are tested with bad claim experience. Customers are less likely to renew when they don’t get the compensation they were hoping for after a loss. This is actually a very good sign that they are wising up and not taking lousy excuses offered and choosing to walk out. The thing is that there is a high chance they are never coming back after such an experience.
Naturally, they are happy to renew their policies once they have an amicable claim settlement. And the people who stayed with their carriers even though they weren’t happy with the claim outcome do so after carefully checking their options. And they look into coverage more closely. So, people can also quickly get informed thanks to the web and form their own opinions as to what is fair, reasonable and acceptable.
According to the survey the following are the best auto insurance companies by region:
California: Wawanesa
Central: Auto-Owners Insurance
Florida: Allstate
Mid-Atlantic: State Farm
New England: Amica Mutual
New York: State Farm
North Central: GEICO
Northwest: GEICO
Southeast: Farm Bureau Insurance – Tennessee
Southwest: American Family and GEICO
Texas: Texas Farm Bureau
Source; J.D. Power
What it means is that more of their customers are happy in comparison to competitors. It certainly doesn’t mean that they are the cheapest. Also, the best company for you may be a totally different one based on your age, driving record, credit score and zip code. Some of these brands are well known for frowning upon high-risk drivers or zip codes.
As always, the best way to shop for car insurance is online and now there is very little argument against it. In a very short time, you can go through many carriers, check their offers and coverage packages and get quotes. Then, you could see if one of the companies above is still in the list. Or you could go out of your way to sign up with them without checking anyone else and pay their price. This may actually be a sound choice if you think you are likely to have a claim in the near future.