Led primarily by increases in satisfaction with policy offerings and billing and payment, overall Us customer satisfaction with auto insurance companies has reached an all-time high, according to the J.D. Power and Associates 2012 US Auto Insurance Study released on Monday.
The study measures customer satisfaction with auto insurance companies across five factors: interaction; price; policy offerings; billing and payment; and claims. Overall satisfaction with auto insurance companies is 804 (on a 1,000-point scale), up 14 points from 2011. Satisfaction levels in 2012 are the highest since the study was launched in 2000.
Satisfaction increases in all factors in 2012, with significant improvements in policy offerings (+30 points) and interaction (+19 points). Satisfaction with price is essentially unchanged from 2011.
“Although satisfaction with price remains consistent from 2011, auto insurance companies have made great strides in all other areas,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates. “Specifically in the area of policy offerings, a number of insurance companies place an emphasis on product differentiation in their advertising and packaging of discounts and offerings..
Among customers whose insurers meet or exceed all their service expectations, modest rate increases appear to be well tolerated, provided the rate adjustment amounts to less than $50. However, larger rate adjustments may trigger customers to consider shopping for a new insurer, especially those customers who are less engaged with their insurance company. One method auto insurers can use to mitigate dissatisfaction with increasing rates is to proactively communicate the rate change prior to the renewal notice, and engage in discussions with customers regarding their options.”
Discussing rate increases with customers and offering options may have a positive effect on satisfaction. Of auto insurance customers receiving a rate increase, 56% were not notified prior to the renewal notice, among whom satisfaction is 746. Conversely, satisfaction among customers who were notified prior to a rate increase and had a discussion with their insurer is 807.
Research conducted by J.D. Power’s Consumer Insight and Strategy Group finds that a significant proportion of social media comments on the topic of personal auto insurance rate hikes indicate a strong desire to switch insurers, or to begin the shopping process. Additionally, many ask peers whether they have experienced similar results with a specific insurer or whether they would recommend another insurer altogether.
“Our research shows that most customers who shop for insurance ultimately do not switch. However, among those who are driven to shop because they are dissatisfied with the service they receive, three of four will keep shopping until they find a new insurer. With many insurers filing new property and auto rates across the country, a growing proportion of customers are starting to receive rate increase notifications, often a catalyst for shopping behaviour,” Bowler said. “Proactively notifying customers and discussing options may help mitigate disappointment and shopping for insurance.”
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