J.D. Power and Associates Reports: Increase in Overall Satisfaction With Auto Insurance Companies
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WESTLAKE VILLAGE, Calif., Aug. 17 -- Overall customer satisfaction with auto insurance companies is up significantly in 2009, driven primarily by low premiums, according to the J.D. Power and Associates 2009 National Auto Insurance Study(SM) released today.
The study measures customer satisfaction with auto insurance companies across five factors. In order of importance, they are: interaction, policy offerings, billing and payment, price and claims.
Overall customer satisfaction with auto insurance companies has reached a five-year high in 2009, averaging 801 on a 1,000-point scale--up by 14 points from 2008. More than one-half of the 32 companies ranked in 2009 have improved significantly year over year. While satisfaction has increased for the four most important factors contributing to overall satisfaction, the most notable increase has occurred in the area of price, which is up by 32 points from 2008. In addition, 42 percent of customers in 2009 report that their premiums decreased--without the customer switching to another insurer--which is nearly twice the rate from 2008.
Historical data from J.D. Power and Associates indicates that approximately 12 months after the start of the 2001 to 2002 recessionary period in the U.S., overall customer satisfaction with auto insurance companies declined considerably as insurance companies raised rates. As signs of market hardening and rising rates are already beginning to show in the 2009 recessionary period, a similar decline in customer satisfaction could ensue in 2010 and 2011.
"If history repeats itself, one could anticipate a notable decline in overall customer satisfaction as a result," said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates. "However, such upheaval in the marketplace creates opportunities for insurers to differentiate themselves and gain a competitive advantage. Most notably, companies that compete less on price and more on quality of services or through affinity relationships may be able to mitigate some of the expected decline in satisfaction."
One key behavior that can help mitigate dissatisfaction is engaging customers in discussions about rate increases prior to policy renewal time. When customers are notified in advance of rate increases greater than $100, and insurers or agencies offer to discuss coverage or policy options available that may mitigate the price change, customers are significantly more satisfied with their insurer overall.
Amica Mutual ranks highest in customer satisfaction with auto insurance companies for a 10th consecutive year, followed by State Farm, Shelter, Auto-Owners, Erie Insurance and COUNTRY, respectively. Although not included in the rankings due to the closed natures of their respective memberships, New Jersey Manufacturers Insurance Company (NJM) and USAA also achieve high levels of customer satisfaction.(1)
The study finds that important shifts have occurred in the area of non-claims interaction, which is the most important factor driving overall satisfaction. Customer satisfaction with Web sites and call centers has improved considerably from 2008. In addition, while agency insurers perform more strongly in the interaction factor than do direct insurers, the advantage of agencies in this regard is slight--an increase of only seven index points.
"The erosion of the advantage that agency insurers have traditionally held in the interaction factor reflects both the improvements achieved by direct channels as well as the changing needs and expectations of consumers today," said Bowler. "Insurance customers are increasingly seeking the ability to research and change coverage options at their convenience and beyond typical agency hours. While direct insurers have updated their Web sites and phone-based customer service systems accordingly, a number of agency insurers have some catching up to do."
The 2009 National Auto Insurance Study is based on 22,930 responses from auto insurance policyholders. The study was fielded in March and April 2009. To view the management discussion based on this year's study findings titled "Preparing for the Hard Market in Personal Auto Insurance," please click here.
For more information, read an article or view auto insurance provider ratings at JDPower.com.
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(1) USAA is an insurance provider open only to U.S. military personnel and their families. New Jersey Manufacturers Insurance Company is open only to New Jersey Business & Industry Association members, State of New Jersey employees, New Jersey Manufacturers Insurance Company's previously insured drivers and/or previous/current auto/homeowner policyholders.
Customer Satisfaction Index Ranking J.D. Power.com Power Circle Ratings (Based on a 1,000-point scale) For Consumers Amica Mutual 851 5 State Farm 831 4 Shelter 828 4 Auto-Owners 825 4 Erie Insurance 823 4 COUNTRY 816 4 Automobile Club of Southern California 813 3 American National Property & Casualty 812 3 GEICO 806 3 American Family 802 3 Alfa 801 3 Grange 801 3 Industry Average 801 3 The Hartford 800 3 Farmers 797 3 Progressive 796 3 Allstate 794 3 Nationwide 794 3 Ameriprise 793 3 California State Automobile Association 793 3 Liberty Mutual 790 3 MetLife 788 3 Automobile Club Group 783 3 Encompass 783 3 The Hanover 783 3 Esurance 776 3 Safeco 776 3 Mercury 771 2 Travelers 770 2 Commerce 766 2 21st Century 762 2 GMAC 751 2 AIG 719 2 *USAA 900 **New Jersey Manufacturers Insurance Co. 869 *USAA is an insurance provider open only to U.S. military personnel and their families and therefore is not included in the rankings. **New Jersey Manufacturers Insurance Co. is an insurance provider open only to New Jersey Business & Industry Association members, State of New Jersey employees, New Jersey Manufacturers Insurance Company's previously insured drivers and/or previous/current auto/homeowner policyholders and therefore is not included in the rankings. Power Circle Ratings Legend: 5 - Among the best 4 - Better than most 3 - About average 2 - The rest About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company operating in key business sectors including market research, forecasting, performance improvement, Web intelligence and customer satisfaction. The company's quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.
About The McGraw-Hill Companies
Founded in 1888, The McGraw-Hill Companies is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor's, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2008 were $6.4 billion. Additional information is available at http://www.mcgraw-hill.com/.
J.D. Power and Associates Media Relations Contacts: John Tews; Troy, Mich.; (248) 312-4119; media.relations@jdpa.com Syvetril Perryman; Westlake Village, Calif.; (805) 418-8103; media.relations@jdpa.com
