Customer satisfaction with auto insurers has dropped from a year ago, but remains high overall, according to this year’s auto insurance research from J.D. Power and Associates, titled “2013 U.S. Auto Insurance Study.”
Overall satisfaction with auto insurance companies is 794 (on a 1,000-point scale), which is 10 points less than the sector scored in 2012. Despite this drop, satisfaction in 2013 is the second-highest level achieved by auto insurers since the study launched in 2000. To see which five insurers ranked highest in each region, click here.
The study measures customer satisfaction across five factors: interaction, price, policy offerings, billing and payment and claims. In all five factors, auto insurers’ scored dropped in 2013, with price and policy offerings both declining by 13 points.
Among the five factors, price satisfaction is lowest at 716 — more than 100 points lower than the average scores for interaction and claims.
"In 2013, there is a sharp rise in the number of customers who have experienced premium increases," said Jeremy Bowler, senior director of the global insurance practice at J.D. Power. "The dollar amount of those increases is also larger, averaging $153 in 2013, compared with an average rate increase of $113 reported in the 2012 study."
The study also found that customers are more tolerant of rate increases when their insurer makes them aware of the change ahead of time and communicates reasons for the change.
According to the research, when customers receive pre-notification, and discuss their options prior to renewal, satisfaction averages 698, which is 67 points higher than among customers whose did not get to discuss a rate increase prior to renewal. When they don’t receive pre-notification, many opt to shop and switch to a new insurer instead of adjusting their current policy.
The study finds that only 16 percent of customers with a rate increase indicate that they had a discussion with their insurer regarding potentially changing their coverage.
"In today's low-interest market, many insurers are filing for new rate structures in order to rectify underwriting losses," said Bowler. "To prepare for the likely downturn in customer sentiment and risk of increased attrition following a premium increase, insurers need to do a better job of proactively reaching out to their customers and explaining the reasons behind the rate increases."
This year’s study expanded its regional methodology to include 11 regions, including four state-specific regions. Similar to the overall industry, satisfaction has declined in each of the regions, compared with 2012, though the change varies by region.
Compared with 2012, the Central region declined the least in overall satisfaction (four points), while the Texas region declined the most (23 points).
The following is a list of highest-ranking insurers from each region. To see the top five in each region, click here:
California: Wawanesa (820)
Central: State Farm (833)
Florida: MetLife (808)
Mid-Atlantic: State Farm (836)
New England: Amica Mutual (850)
New York: New York Central Mutual (814)
North Central: Auto-Owners Insurance (833)
Northwest: PEMCO Insurance (834)
Southeast: Tennessee Farm Bureau (850)
Southwest: State Farm (824)
Texas: Texas Farm Bureau (862)
J.D. Power noted in the research that New Jersey Manufacturers Insurance Company (NJM) and USAA, who received multiple scores of more than 900, also achieved high levels of customer satisfaction in the study, though they are not included in the rankings due to the closed natures of their respective memberships.
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