Sustained premium increases, changing customer behavior, and growing reliance on digital channels are shaping key challenges for insurers as they enter 2026. Findings from J.D. Power Insurance Intelligence studies and proprietary market data show that rate pressure is influencing shopping activity, retention, and customer expectations across the industry.
Rate Increases Drive Shopping and Switching
In 2025, 57% of auto insurance customers shopped for coverage, up from 49% in 2024. Unlike previous years, more customers are now finding lower prices and acting on them. As a result, 29% of insurance customers switched insurers in 2025.
Although overall customer satisfaction remained stable, increased competition and more aggressive pricing have made switching easier. This shift is expected to continue putting pressure on insurers in 2026.
High-Value Customer Retention Weakens
Premium increases are also affecting customers who have historically been viewed as the most loyal. High-value customers, defined by their likelihood to bundle products and maintain long-term relationships, are now among the least likely to renew. Only 51% say they will definitely stay with their current insurer.
Understanding premium changes plays a key role in satisfaction. Customers who understand why rates increase report higher satisfaction than those who do not. In the absence of clear explanations, some customers are turning to artificial intelligence tools to learn insurance terminology, evaluate coverage, and compare quotes, altering how they interact with insurers.
Digital Channels Take a Central Role
Digital engagement continues to expand across the insurance lifecycle. Nearly half of all policy buyers, or 47%, now purchase coverage through digital channels, compared with 35% through agents and 17% through call centers.
According to the J.D. Power 2025 U.S. Auto Insurance Study, providing a seamless cross-channel experience is the strongest driver of customer satisfaction. Customers who begin interactions through an insurer’s mobile app are more likely to report seamless experiences than those who start by phone or with an agent.
Digital experience quality also influences future behavior. When customers report excellent digital experiences, 92% say they will continue using digital channels. That figure drops to 40% among customers who report poor digital experiences.
Usage-Based Insurance Shows Mixed Results
Usage-based insurance programs continue to evolve as insurers refine their approaches. In 2025, 17% of insurers offered usage-based insurance, up from 15% in 2024 but down from 22% in 2023.
Mobile apps remain the most common method for collecting driving data, though they are associated with lower satisfaction scores than other methods. Satisfaction averages 628 for app-based programs, compared with higher scores for onboard vehicle systems, installed devices, and self-reported data.
Usage-based insurance is often positioned as a way to reduce premiums. Its effectiveness depends on customer trust in how driving data is collected and used.
This Insurance Intelligence Report is based on data from J.D. Power Insurance Intelligence studies conducted during 2025 and was authored by Craig Martin, Stephen Crewdson, and Tony Soloman of J.D. Power.
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