Insurers Shift Focus to High-Value Client Acquisition and Retention After Years of Rising Rates and Record Policy Shopping

The nation’s auto insurers have returned to profitability for the first time in years and that has them shifting gears from a focus on raising rates and exiting unprofitable markets to shoring up relationships with their highest-value customers. According to the J.D. Power 2025 U.S. Auto Insurance Study,^SM released today, insurers will have their work cut out for them as they confront a marketplace in which 38% of customers are currently not very satisfied.

“Now that insurers are shifting back into growth mode, they really need to focus on cultivating and keeping high-value customers,” said Stephen Crewdson, managing director of insurance business intelligence at J.D. Power. “But among many of those customers, overall satisfaction this year is not particularly high. To shift that perception after the past few years of significant rate increases, insurers need to focus on delivering a tailored, seamless customer experience across all channels.”

Following are some key findings of the 2025 study:

• More than one-third of customers not very satisfied: While overall customer satisfaction with auto insurers declines just 2 points to 644 (on a 1,000-point scale) from a year ago, more than one-third (38%) of customers fall into the bottom segment of customer satisfaction scores, which makes them exceedingly less likely to renew their policies with their existing insurer and more likely to shop around for a better deal.

• Highest lifetime value customers at risk: Customers with higher overall lifetime value profiles, who have higher annual premiums, long tenure with their current insurer and multiple policies with that insurer also have the lowest likelihood to renew with their existing insurer. Just 51% of high-value lifetime customers say they “definitely will” renew with their insurer, which is lower than the medium-value lifetime customer (53%) and low-value lifetime customer (54%) segments.

• Price gets customers in the door, but good service keeps them: Good rates and low costs are the top reasons auto insurance customers cite for purchasing from an insurer, but when it comes to renewing an existing policy, good service and positive claims experience are the top drivers of client retention.

• Seamless cross-channel interactions drive customer experience: A seamless experience across channels is the most important driver of overall satisfaction among auto insurance customers. When insurers deliver on this key performance indicator, customers are significantly more likely to have higher levels of trust in their insurer; feel better about the people they are working with; and feel like it is easy to work with their insurer.

The study measures customer satisfaction with auto insurance in 11 geographic regions. A separate category addresses usage-based insurance (UBI), along with diagnostics that influence UBI participants’ experience with their insurer’s usage-based auto products. Highest-ranking auto insurers and scores by region are as follows:

California: Auto Club of Southern CA (AAA) (676) (for a second consecutive year)

Central: Shelter (673) (for a fifth consecutive year)

Florida: Allstate (660) and GEICO (660) in a tie

Mid-Atlantic: NJM Insurance Co. (721)

New England: Amica (735) (for a second consecutive year)

New York: New York Central Mutual (652)

North Central: Erie Insurance (684) (for a fifth consecutive year)

Northwest: State Farm (648)

Southeast: Erie Insurance (718)

Southwest: CSAA Insurance Group (AAA) (676) (for a second consecutive year)

Texas: Nationwide (657)

Usage-Based Insurance (UBI): Nationwide (698) (for a second consecutive year)

See the rank chart for each region at http://www.jdpower.com/pr-id/2025060.

The U.S. Auto Insurance Study, now in its 26^th year, measures customer satisfaction with auto insurers based on performance in seven core dimensions on a poor-to-perfect rating scale. Individual dimensions measured are (in order of importance): level of trust; price for coverage; people; ease of doing business; product/coverage offerings; problem resolution; and digital channels. This year’s study is based on responses from 48,121 auto insurance customers and was fielded from May 2024 through April 2025.

For more information about the U.S. Auto Insurance Study, visit

https://www.jdpower.com/business/insurance/auto-insurance-study.

About J.D. Power

J.D. Power is a global leader in consumer insights, advisory services, and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, J.D. Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 55 years. The world's leading businesses across major industries rely on J.D. Power to guide their customer-facing strategies.

J.D. Power has offices in North America, Europe and Asia Pacific. To learn more about the company's business offerings, visit JDPower.com/business. The J.D. Power auto-shopping tool can be found at JDPower.com.

About J.D. Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info

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