Prepared for Elizabeth D. | Delivered November 19, 2019
Auto Insurance Customer Acquisition Spend
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Gain information on how much auto insurance companies pay per year to acquire and retain customers/members, in order to understand the value of improving customer satisfaction to maintain customers compared to spend on gaining new customers
Insurance companies allocated about
44% of resources
to customer acquisition compared to 18% on retention.
The average cost per customer acquisition for direct insurers such as Progressive and Geico is
The average cost per customer acquisition for captive insurers like State Farm and Allstate is
Insurance companies using independent agents increased their average cost of customer acquisition by as much as
$900 per acquisition.
Customer acquisition rates for insurance companies are about
of the net profit margin on average.
An increase of
customer acquisition rates can increase an insurance company's profits between
According to one study, loyal customers are
likely to lead to referrals
, as they often speak highly of insurance companies that exceed expectation, so focusing on existing customer satisfaction contributes directly to acquisition.
Auto insurance companies GEICO, Progressive, and Automobile Club of Southern California had the
for their advertising in the personal auto insurance space.
A study on those companies showed that customer acquisition wasn't just related to overall marketing spend, but rather
"factors such as
advertisement content, advertisement demographics targeted, word of mouth, brand reputation and other items".