Acxiom Study Reveals Who's Cutting Corners and Who's Not When Shopping for Auto Insurance

Auto insurers confounded by shifting purchase patterns can betterunderstand the mindset of consumers -- and adjust marketing plansaccordingly -- with today's release of the first Insurance ConsumerDynamics study by Acxiom®Corporation (Nasdaq: ACXM), a global leader in interactivemarketing services.

The "eye-of-the-consumer" analysis reveals which consumer segments aremore likely to maintain policies with their current insurer and whichare actively looking for change to fulfill their auto insurance needs.

"As the auto insurance industry navigates through this challengingeconomy, consumers are instrumental in driving change, creating a newmodel for insurers," said Holly Marr, Acxiom vice president, insurancepractice. "Using proprietary segmentation-modeling,Acxiom offers insurers a new and timely approach to segment and groupconsumers, creating a competitive market advantage."

Acxiom's proprietary research was conducted to help auto insurersconfront a number of critical issues:

Changing shopping and buying patterns of auto insurance consumers

Increased customer churn of certain customer segments

Evolving customer preferences related to desired value propositions

Commoditization of auto insurance

Acxiom's Insurance Consumer Dynamics study was designed to help insurersfind solutions to these challenges and to identify key consumer segmentsfor new and existing customers. The study identifies which segments ofconsumers are looking for a new value proposition, which are shoppingonline for new alternatives and which have the greatest potential fordirect or agent led insurers.

Acxiom analyzed auto insurance consumer-behavior traits and generalmotivations, which resulted in the identification of eightdifferentiated consumer segments: Price Isn't Primary, SolidSuburbans, Full House, The Nest is Empty, Country Middles, StretchedSingles, Hands Full and Getting By.

The study groups each segment into three categories to indicate likelypurchasing behavior:

Staying the Course represents the status quo. These consumersvalue the agent relationship, are the most economically stable, have thehighest income and are least likely to shop around. This group comprises PriceIsn't Primary, Solid Suburbans and Full House consumersegments.

Open to Options consumers believe price is important butis not the only consideration. They have the most adults and vehiclesper household. They are economically stable in the mid-range of incomes.They are willing to consider a good value but are not desperate tochange. This group is made up of The Nest is Empty and CountryMiddles consumer segments.

Cutting Corners is looking for ways to save. Household membersshare vehicles and are actively engaged in price shopping. They rank atthe bottom of the scale in economic stability. Consumer segments include StretchedSingles, Hands Full and Getting By.

"For auto insurers, the implications of the study are significant," saidMarr. "With nearly every insurer facing constrained marketing budgets,effectively reaching offer-receptive consumers is more critical now thanever. The consumer segmentation and analysis contained in this studyhelps guide strategies for reaching the right consumer with the rightoffer via the right channel."

Acxiom's study finds a consumer-centric approach can help a variety ofauto insurers in several ways:

Captive and direct insurers can more accurately target specific groupsof consumers who are less active in the marketplace yet open to change(Open to Options consumers).

Member-based firms can deliver timely communications to consumerhouseholds recognized as actively shopping (consumers who are CuttingCorners).

Direct insurers can study the characteristics of consumers who preferthe agent model and target them with appropriate offers, emphasizingreliability and service (Staying the Course consumers).

The study reveals why Staying the Course consumers generally viewprice as less important and are likely to generate higher premiumdollars because they favor more coverage, drive more vehicles and havemore licensed drivers per household. Compared with other groups, theytend not to favor direct carriers.

"Insurers servicing these customers should protect their base throughcontact with an agent or member organization and provide a strongservice offering with attractive multiple-item coverage," said Marr."Marketing communications that point out the benefits of theirfull-coverage policies will resonate with this group."

Open to Options consumers are an attractive prospecting target,according to the study. This price-conscious group primarily compriseshouseholds with multiple drivers and vehicles. They use the Internet togather information and aren't afraid to shop around for good deals.

"It's important to note the motivation behind their price-driventendencies," said Marr. "They like to feel like they've made smartchoices, whether or not cost was actually the deciding factor. Insurerswho service Open to Options consumers also need to know theseindividuals have the potential to be long-term customers if they aretreated well and if the insurer can foster a sense of trust."

Acxiom's research found those who are Cutting Corners tend tolook for insurance carriers who specialize in basic coverage. "The factthat they're relatively easy to attract needs to be balanced with thereality that they're probably just as inclined to leave should an evenbetter offer present itself," said Marr. "Insurers who would fare bestwith Cutting Corners consumers are those who approach thebusiness aggressively, keep a tight control on expenses and use volumeas a counter-balance to the lower margins these customers provide."

The findings of the Insurance Consumer Dynamics Study were developed byanalyzing 70 lifestyle segments across the United States using Acxiom®PersonicX® market segmentation system. PersonicX determined thedemographic characteristics and the motivating behaviors that causeconsumers to act.

"When it comes to the future of auto insurance, consumers are clearly inthe driver's seat," said Marr. "Through their intentions and actions,consumers are creating a blueprint for insurers on how to structure theever-evolving agent and/or direct model. The hallmark of that model isthe need for value propositions tailored to individual customerpreferences."

To download a free copy of the Insurance Consumer Dynamics study, email inscondyn@acxiom.com,go to www.acxiom.com/insuranceconsumerdynamicsor call +1 888.3ACXIOM (888.322.9466).

About Acxiom

A global leader in interactive marketing services, Acxiom helps clientsconnect with their customers through deep consumer insight that enableseffective and profitable marketing initiatives and business decisions.Our consultative approach spans multiple industries and incorporatesdecades of experience in consumer data and analytics, informationtechnology, data integration, and consulting solutions for effectivemarketing across digital, Internet, email, mobile and direct mailchannels. Founded in 1969, Acxiom is headquartered in Little Rock, Ark.,and serves clients around the world from locations in the United States,Europe, and Asia-Pacific. For more information about Acxiom, visit www.acxiom.com.

Acxiom and PersonicX are registered trademarks of Acxiom Corporation.

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