Customer satisfaction with auto insurers now is at a record-high, despite premium increases over the past five years, according to the “J.D. Power 2014 U.S. Auto Insurance Study.” The survey measured customer satisfaction in five areas, including interaction, price, policy offerings, billing and payment, and claims. Results are based on responses from 44,661 auto insurance customers, collected in March and April 2014.

Overall satisfaction increased by 16 points on a 1,000-point scale to 810 in 2014, J.D. Power said, the highest since 2000, when the annual study began. At $86, the average premium increase was lower this year, compared with $153 in 2013. According to the “J.D. Power 2014 U.S. Insurance Shopping Study,” released in April, 13 percent of customers who experience a premium increase shop for a new provider.

“A premium increase often triggers shopping behavior, but we’re seeing fewer people shopping,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power. “This indicates that insurers are more effectively communicating with their customers, making them aware of the premium increases when they occur and why they’re necessary, and demonstrating the value of their coverage.”

The customer experience improved significantly across all five factors. The largest year-over-year increase was in price, which increased 20 points, and billing and payment, which increased 19 points. “Interaction, the factor with the largest impact on overall satisfaction, improves by 13 points,” J.D. Power said.

More customers saw their premiums remain the same during the past 12 months, 55 percent vs. 52 percent in 2013, J.D. Power said. And more insurers, 57 percent vs. 53 percent in 2013, notified customers of the rise in premiums through their preferred communication channel.

Also see: Customer Experience: Coming of Age

Among technologists, customers who prefer to interact through technology, more than 60 percent have interacted with their insurer in the past 12 months through their carrier’s website, social media and other digital channels. And 40 percent have communicated exclusively via digital channels, J.D. Power said.

Most of the satisfaction improvement this year came from the smaller insurers. Based on the amount of written premium, the 20 largest insurers in aggregate improved by 10 points compared with 2013, while the smallest insurers, those outside of the largest 30, improved by 41 points, J.D. Power said.

Overall satisfaction, at 867, was highest among “Loyal Advice Seekers,” customers least likely to both shop and switch carriers due to relationships with their agents.  Satisfaction was lowest, at 742, among “Unengaged” customers, those who have little relationship with their insurer. More than half, 51 percent, said they definitely would renew their auto insurance policy with their current provider, up from 49 percent in 2013. And, 49 percent said they definitely would recommend their insurer to family and friends, an increase from 48 percent last year.

Leaders by Region

Satisfaction varies regionally from a high of 820 in the Texas and Central regions to a low of 795 in the California and New England regions, J.D. Power said. Ten of the 11 study regions posted double-digit increases compared to last year, with the largest improvements in the New York, +29 points, and New England, +26, regions.

  • California: Wawanesa (852) ranked highest in the California region; Ameriprise ranked second at 824 and Auto Club of Southern California Insurance Group ranked third at 822.
  • Central: Auto-Owners Insurance (853) ranked highest in the Central region, followed by Shelter (844) and State Farm (830).
  • Florida: The Hartford (827) ranked highest in the Florida region. Auto-Owners Insurance (815) and Progressive (811) followed The Hartford in the rankings.
  • Mid-Atlantic:  The Hartford (833) ranked highest in the Mid-Atlantic region. Erie Insurance (830) ranked second, and GEICO and State Farm ranked third in a tie (809 each).
  • New England: Amica Mutual (868) ranked highest in the New England region. State Farm (833) ranked second and Nationwide (814) third.
  • New York: GEICO and State Farm ranked highest in the New York region in a tie (822 each). New York Central Mutual (811) ranked third.
  • North Central: Auto-Owners Insurance (840) ranked highest in the North Central region. State Farm (829) ranked second and Grange Insurance (826) third.
  • Northwest:PEMCO Insurance (854) ranked highest in the Northwest region, followed by The Hartford (834) and State Farm (829).
  • Southeast: Tennessee Farm Bureau (844) ranked highest in the Southeast region. North Carolina Farm Bureau (843) ranked second and Auto-Owners Insurance (839) third.
  • Southwest: State Farm (836) ranked highest in the Southwest region. Liberty Mutual and The Hartford ranked second in a tie (820 each).
  • Texas: Texas Farm Bureau Insurance (852) ranked highest in the Texas region.  Allstate (830) ranked second and State Farm (826) third.
  • New Jersey Manufacturers Insurance Company (NJM) and USAA also achieved high levels of customer satisfaction in the study, although they are not included in the rankings due to the closed nature of their respective memberships. 

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