Auto Insurance Companies Enjoy Record-High Customer Satisfaction in 2014
By Jeff Youngs,
Despite steady premium price increases over the past five years, auto owners' satisfaction with auto insurance has reached record-high levels since 2000, the first year J.D. Power conducted its U.S. Auto Insurance Study. The 2014 study, which measures customer satisfaction with interaction; price; policy offerings; billing and payment; and claims, is based on responses from nearly 45,000 auto insurance customers.
This year, smaller and fewer premium increases--compared with last year--are largely responsible for a substantial portion of the increase in satisfaction. In 2014, 55% of survey respondents indicate their insurance premiums did not increase. Among those whose premiums did increase, the average in this year's study was $86, compared with $153 in 2013. Interestingly, the J.D. Power 2014 U.S. Insurance Shopping Study,SM released in April 2014, finds that 13% of consumers who experience rate hikes shop for a new provider.
"A premium increase often triggers shopping behavior, but we're seeing fewer people shopping," said Jeremy Bowler, senior director of the insurance practice at J.D. Power. "This indicates that insurers are more effectively communicating with their customers, making them aware of the premium increases when they occur and why they're necessary, and demonstrating the value of their coverage."
Additional highlights of this year's study include:
- Customer loyalty and advocacy have improved, with small increases in the number of respondents who indicate they will renew their current policy or will recommend their current provider.
- Strong relationships with insurance agents can lead to higher overall satisfaction and lower cross-shop and carrier-switch behaviors in customers. Satisfaction is lowest among customers who are unengaged--those who have little, if any relationship with their insurer.
- Although satisfaction has increased across the industry, at the insurer level, smaller insurance companies experience the largest improvement in satisfaction in 2014, compared with larger companies.
- State Farm was among the three highest-ranked car insurance companies in 8 of 11 regions.
Listed below, alphabetically by region, are the highest-ranked insurance companies in the J.D. Power 2014 U.S. Auto Insurance StudySM:
Central: Auto-Owners Insurance
Florida: The Hartford
Mid-Atlantic: The Hartford
New England: Amica Mutual
New York: GEICO and State Farm (tie)
North Central: Auto-Owners Insurance
Northwest: PEMCO Insurance
Southeast: Tennessee Farm Bureau
Southwest: State Farm
Texas: Texas Farm Bureau Insurance