AI usage is growing across all facets of the car-shopping process, with artificial intelligence now playing a key role in auto insurance decisions and insurers’ own tools emerging as a go-to source for consumers, according to JD Power.
First things first: A recent study by the insights company found that nearly one-third (29%) of auto and home insurance customers are using artificial intelligence (AI) tools to research products and coverage, service their accounts, understand coverage before submitting a claim, or shop for a quote or new policy.
Among consumers using AI for research, 34% are using tools provided by insurers on their websites or apps, while 33% are using third-party websites or apps.
When seeking quotes, 25% of consumers are using insurer-provided tools and 21% are using third-party solutions.
For account servicing tasks, 27% of customers use insurer-provided tools, while just 8% use third-party websites and apps, per the study.
Digging deeper: The overall impact of AI on consumers’ decision-making when researching and shopping for insurance coverage is even more revealing.
More than one-third (37%) of customers who used AI to research products or coverage options changed their policy based on the information they received.
Among those who used AI to shop for a new policy, 42% purchased a policy as a result, according to J.D. Power.
What they’re saying: “Just as we’ve seen with the internet and mobile apps, AI is rapidly becoming a critical conduit to key policy shopping, research and account management decisions among auto and home insurance customers,” said Tony Soloman, director, insurance intelligence at JD Power. “This is a multidimensional challenge and opportunity for insurers.”
Why it matters: AI is increasingly influencing decisions tied to vehicle ownership beyond the initial purchase, giving dealers another reason to understand how customers are using the technology as they evaluate costs, coverage, and other factors that can shape affordability and ultimately influence a sale.
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Between the lines: AI in insurance decision-making mirrors a broader trend as more consumers turn to artificial intelligence when shopping for vehicles, underscoring the need for dealers to be more intentional about how they adopt the technology.
24% of consumers say AI helps them feel more prepared when working with dealerships, and 63% say they will definitely or probably use AI for their next vehicle purchase, according to a recent Cox Automotive report.
The Cox study also found that 69% of dealers expect AI to drive sales and revenue growth, but about 1 in 3 either aren’t measuring AI’s impact or have no clarity on how they’re measuring it.
Bottom line: Dealers that understand how consumers are using these tools and adapt their own AI strategies accordingly could be better positioned to engage increasingly AI-assisted shoppers and convert them into buyers.
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