How are rising insurance rates shaping consumer decisions, and what strategies can brands implement to stay ahead in an increasingly competitive market?

By Reed Preziosi, Account Executive

In recent years, consumers have been feeling the pressure of rising insurance rates. And in a recent Suzy survey, 4 in 10 (44%) consumers told us they have noticed an increase in their insurance costs. A similar amount of consumers (45%) are concerned about even more price hikes. As someone who helps insurance brands achieve their business objectives, keeping up with consumers is always a top priority.

From auto to health insurance, premiums have surged, leaving many policyholders searching for alternatives or cutting back on coverage. These increasing costs are reshaping consumer behavior and challenging brands to adapt quickly.

How Rising Insurance Rates Are Shaping Consumer Decisions

The rising cost of insurance is undeniable. Over the past two years, auto insurance rates have risen by an average of 14% across the United States, according to the Insurance Information Institute.

Health insurance premiums have also seen significant hikes, with the average cost of employer-sponsored family health coverage increasing by 7% in 2023 alone, based on data from the Kaiser Family Foundation.

These increases are leading consumers to become more price-sensitive and risk-averse. According to a recent survey, 30% of policyholders said they had switched insurance providers in the last 12 months to find lower premiums. Consumers are increasingly utilizing online comparison tools, and nearly 60% of respondents would use online tools to switch. As a result, competition among insurance providers has intensified, with customers jumping between brands to find affordable rates.

This behavior isn't isolated to low-income consumers. Middle- and high-income households are also feeling the pinch, especially as inflation affects the cost of living. 40% of workers report cutting back on insurance coverage to save money, particularly on non-essential policies like renters' and life insurance.

Leveraging Consumer Research to Retain and Acquire Customers

As rising insurance rates push consumers to reevaluate their coverage, understanding their evolving preferences has never been more critical for brands. Companies can leverage research to identify which factors consumers prioritize, such as price, customer service, and policy customization. For instance, a recent study by Suzy found that 64% of insurance customers are willing to switch providers if they find a company that offers more personalized policy options.

To stay competitive, insurers can use market research tools to gather real-time insights on consumer sentiment. Brands have the ability to retarget audiences from both a quantitative and qualitative perspective with Suzy combining data and the voice of the consumer into their research approach. Leveraging such data, brands can develop targeted strategies, offering customers tailored pricing plans, loyalty discounts, or improved digital experiences.

Additionally, as consumers increasingly rely on digital platforms to compare rates and make decisions, brands that optimize their digital offerings—through user-friendly apps or instant quote features—stand a better chance of retaining customers. Insurance brands are combining monadic testing with in-depth interviews to test website layout designs and understand consumers' digital navigation. Millennials, in particular, prefer managing their finances via mobile apps, emphasizing the importance of a seamless digital experience.

Last words

Rising insurance rates are changing the way consumers approach their policies, and brands must adapt to this new reality. By investing in consumer research, insurers can gain valuable insights into customer priorities, helping them to create competitive, tailored offerings. In a market where customers are increasingly price-sensitive and willing to switch providers, brands that understand their audience will be better equipped to retain and attract customers.

Want to learn how consumer insights can help your brand navigate rising insurance rates? Book a demo with Suzy today to discover how real-time research can help you retain and acquire customers more effectively.