Price sensitivity rises among auto insurance buyers: Survey

Mainstream adoption of technology is having a major impact on the way auto insurance customers in Canada interact with their insurance providers, notes the J.D. Power & Associates 2013 Canadian Auto Insurance Satisfaction Study.

In 2013, the percentage of customers using non-traditional channels, such as a provider’s website, has increased by as much as seven percentage points, one-third of all customer interactions, from last year.

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The study, now in its sixth year, also finds auto insurance customers in all three regions – Ontario/Atlantic, Western and Quebec – are more price sensitive in 2013 than they were in 2012, the study notes.

“Although overall satisfaction has increased in the Ontario/Atlantic region, the uptick in insurer-initiated premium increases in the Western and Quebec regions has taken a toll on overall satisfaction,” says Lubo Li, senior director of the services and emerging industries division at J.D. Power & Associates.

Although customers in the Ontario/Atlantic region are the most price sensitive, possibly because there is no crown insurer presence, fewer customers reported premium price increases in 2013.

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Customer satisfaction has declined by nine points in the Western region from 2012, primarily due to a higher number of insurer-initiated premium increases. Some 27% of customers in this region indicated an insurer-initiated increase in 2013, compared with 25% in 2012.

The Quebec region, which achieved the highest customer satisfaction score among all regions in 2012, experiences the largest year-over-year decline in 2013.

Among the three regions, a larger percentage (14%) of customers in the Quebec region in 2013 also indicate that their insurer initiated a price increase, compared with 11% in 2012.

More details of the study and regional rankings here.

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Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.