Auto insurers are returning to profitability, but customer loyalty is tanking — study

After years of heavy losses, U.S. auto insurers have finally turned the corner financially. 

But here's the twist: Just as they're getting back to profitability, their most valuable customers have become the most likely to jump ship.

The findings: The newly released J.D. Power 2025 U.S. Auto Insurance Study exposes a counterintuitive trend. 

• One might expect high-value customers (those paying higher premiums, staying with insurers for years, and bundling multiple policies) to be the most loyal. 

• However, they're the most restless.

By the numbers: Only 51% of these premium customers say they'll "definitely" stick with their current insurer, according to J.D. Power. That's trailing medium-value customers (53%) and budget customers (54%).

• Ironic that the customers driving profit for insurers are also the ones most ready to leave.

Other details: Per J.D. Power, customer satisfaction also varies dramatically by region. 

• New England leads at 735 out of 1,000 points, while the Northwest lags at just 648.

Major dealer markets fall somewhere in the middle:

• Florida: 660

• Texas: 657

• New York: 652

These markets represent prime opportunity zones where customers are already in shopping (and comparing) mode.

Now let’s put the dealership in focus here: Whether a dealership currently offers insurance products or not, this trend creates customer retention opportunities.

For dealers selling embedded insurance: There’s a clear roadmap. 

• Competitive pricing gets attention, but the study reinforces that renewals are driven by service quality and seamless interaction. 

• This means dealerships that treat insurance as an integrated part of the customer journey, rather than a bolt-on, will be better positioned to retain those customers over time.

And for dealers not selling insurance yet: There’s still value to be added.

• In markets with tighter satisfaction spreads or higher dissatisfaction, simply being a knowledgeable advisor during the sales process can build trust and reinforce longer-term service retention.

Bottom line: We’ve outlined before (previous Market Pulse newsletter) that not every dealer wants to prioritize insurance, and not every customer expects it to be front and center. 

But when 38% of customers are actively dissatisfied, and when high-value clients are among the most at risk, dealers can play a strategic role.

Simply put: The better the intel, the sharper the conversation, and the stronger the relationship.

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