Customers: Insurers Outrank Banks

Although the insurance industry remains mired in a soft market, it can at least take solace in the fact that it retains the esteem of its customers relative to other sectors of the financial services industry.

New research from Forrester confirms this, with insurers making up 14 of the top 17 firms listed in the report, “Customer Advocacy 2011: How Customers Rate U.S. Banks, Investment Firms, and Insurers.”

Once again, San Antonio-based USAA led the advocacy ranking with 77% of its customers agreeing with the statement “my financial provider does what’s best for me, not just its own bottom line.”

Independent insurance agents came in with a 65% ranking, followed by State Farm (60%) , AAA Insurance (59%), Farmers Insurance (57%) and American Family (56%).

One noteworthy trend is that five of the top six insurers in the rankings are privately held, and four are mutual companies.

“Free from the quarterly earnings pressure on public companies and chartered to serve their customers’ interests, these private firms can afford to focus on customer advocacy and reap the long-term benefits of deeper customer relationships,” the report states.

Moreover, the report noted that P&C insurers tended to fare better than life insurers, perhaps due to the simplicity of P&C product offerings.

“P&C firms offer relatively simple products that are easy to quote and compare online,” the report states. “After the sale, P&C insurers have relatively few interactions with customers. But when those moments of truth arrive—often, in a claim—the firms can earn lasting goodwill.”