Last year, stung by the worst financial crisis in a generation, it’s not surprising that customers gave U.S. financial institutions the lowest customer advocacy scores ever. One year after the crisis came to a head, however, that tide seems to be ebbing. And for insurers in particular, that’s very good news, scoring better than ever in a recent survey testing customer advocacy.
The survey, “Customer Advocacy 2010: How Customers Rate U.S. Banks, Investment Firms and Insurers,” was conducted by Forrester, a Cambridge, Mass., research firm. It asked thousands of U.S. consumers to rate their financial services firms on a customer advocacy scale.
The 7th annual survey targeted 4,500 consumers in August and September 2009, asking them to rank banks, investment firms and insurance companies in the United States on the issue of who is a better advocate for them.
Trust in financial firms appears to have indeed moved off historic lows from last year. As a group, insurers remained the highest-rated, with more than half of all customers rating their insurers high on customer advocacy this year. Smaller banks did well, said the report, while some of the biggest banks again landed at the very bottom of the rankings. And after years of rating higher than banks, investment firms as a group now score worst, notes Forrester.
The research is meaningful, notes Bill Doyle, the research company’s vice president and principal analyst and author of one of the author’s of the report, because customers who rate their firms high on customer advocacy are more likely to consider their firms for additional products. “Customers who rate their firms low on customer advocacy are most likely to say they intend to switch firms in the next year,” he says.
Of the top-10 rated firms in the survey, USAA took the No. 1 spot, as it has every year, Forrester said. The San Antonio-based insurer limits its coverage to present and past members of the military and their families. Other property/casualty insurance companies on the top-10 list included AAA at No. 6, State Farm in seventh place, and GEICO at No. 10.
Fourteen of the 48 firms in this year’s rankings rose by more than five percentage points year-over-year. More than half of them are insurers; American Family Life Assurance (Aflac), Liberty Mutual Insurance, Travelers, AAA, and American Family Insurance rose the most, up by double-digit percentages over last year. Many of these firms increased advertising in 2009, with advocacy-friendly messages, notes Doyle.
Just one insurer fell more than five percentage points: Progressive Casualty Insurance. What happened? Nothing bad, notes Doyle, adding that Progressive’s rating is actually right in line with its historical average.
“Last year’s score was the firm’s highest ever, buoyed by an aggressive advertising campaign built around comparison shopping and low prices,” he said. “Post-sale service may lag, however: This year, Progressive’s customers ranked it lowest among major insurers on customer service.”
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