After peaking in 2009, overall customer satisfaction with auto insurance companies has declined significantly in 2010, according to [pdf] the J.D. Power and Associates 2010 US National Auto Insurance Study.
Higher Premiums Lower Satisfaction
Overall US customer satisfaction with auto insurance companies averages 777 on a 1,000-point scale, decreasing by 10 points from 787 in 2009. The study measures customer satisfaction with auto insurance companies across five factors: interaction; policy offerings; billing and payment; price; and claims.
J.D. Power analysis indicates the decline in overall customer satisfaction in 2010 is largely attributable to declining satisfaction with price, which has decreased by more than 30 index points compared with 2009. At the same time, price has also gained in relative importance as a driver of overall satisfaction.
The study finds the proportion of customers who report experiencing an increase in premiums has increased significantly to 22% in 2010, compared with 17% in 2009. In addition, six in 10 policyholders who experienced a premium increase indicate they received no advance notice of the change from their insurers.
Amica Mutual Continues Holding Top Ranking
Amica Mutual ranks highest in customer satisfaction with auto insurance companies for an 11th consecutive year with a score of 849. Erie Insurance (815) and Auto-Owners Insurance (813) follow in the rankings.
New Jersey Manufacturers Insurance Company (NJM) and USAA also achieved high levels of customer satisfaction in 2010 according to J.D. Power data, although they were not included in the rankings due to the closed natures of their respective memberships.
Gen Y Policyholders More Critical, Web-savvy
J.D. Power observed the following trends among Gen Y auto insurance customers (born between 1977-1994), with some comparison to trends among Baby Boomer auto insurance customers (born between 1946-64):
- Gen Y customers tend to be more critical of their insurance providers, compared with consumers in other generational groups, particularly regarding the ease of contacting a representative and receiving clear explanations of their insurance policies.
- Baby Boomers (those born between 1946 and 1964) tend to place a great deal of importance on traditional communications from their insurer, such as a new customer welcome kits, newsletters and magazines. Meanwhile, Gen Y customers are more concerned with being able to access their policy information online.
- While website usage among Baby Boomers is increasing, 40 percent of Baby Boomers report using their insurer’s website to review or make changes to their policies, compared with 60 percent of Gen Y
- Gen Y customers are more likely to use mobile auto insurance apps than older customers.
Excellent Customer Service Boosts Spending
Americans will spend 9% more with companies that provide excellent customer service, according to recent data from American Express. A majority of Americans report that quality customer service is more important to them in today’s economic environment (61%) and will spend an average of 9% more when they believe a company provides excellent service.
About the Data: The 2010 US National Auto Insurance Study is based on more than 25,000 responses from auto insurance policyholders. The study was fielded in February and March 2010. J.D. Power and Associates is the publisher of the enclosed chart, which is taken from The 2010 US National Auto Insurance Study.