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Auto Insurance Satisfaction Rises to Record High Driven by Higher Satisfaction among Gen Y

Auto Insurance Satisfaction Rises to Record High Driven by Higher Satisfaction among Gen Y

By Philly Murtha, June 22, 2015

Customer satisfaction with auto insurance providers improves from 2014 and has reached a record high, according to the J.D. Power 2015 U.S. Auto Insurance Study.SM The improvement is mainly due to a substantial increase in satisfaction with customer service interaction among Gen Y customers.1

The U.S. Auto Insurance Study measures customer satisfaction with auto insurers based on five factors (in order of importance): interaction; price; policy offerings; billing and payment; and claims. This year, overall customer satisfaction reaches an all-time high of 818 (on a 1,000-point scale), up 8 points from 2014. Satisfaction levels among Gen Y customers increase most, compared with other generations--Gen Y (+21 points); Gen X (+6); Boomers (+4); and Pre-Boomers (-3).

The largest contributor to this year's improvement is satisfaction with service interaction, which increases by 20 points to 827 for Gen Y customers from 807 in 2014. Gen Y's preference to interact exclusively through digital self-service (Web or mobile) has increased to 27% in 2015 from 21% in 2011.

Interacting through a digital channel has also increased among other generations. However, among interaction channels, satisfaction with the experience on an insurance provider's website receives the lowest average score, especially among Gen Y customers.

"While customers across generations are able to use online self-service for making payments and gathering information about their accounts, they should also be able to resolve more complex issues online," said Valerie Monet, director of the insurance practice at J.D. Power.

However, Monet points out that some interaction is best done in person or over the phone. One-fourth of Gen Y customers would rather talk to someone in person or by phone to discuss price changes or when they have questions about policy coverage.

A few more highlights from the study:
  • A majority of customers from each age group are resolving issues entirely through the website.
  • Nearly three-fourths (73%) of Gen Y customers indicate that they have online access to policy information vs. 62% of customers from the other generations.
  • Awareness of online access to policy information among Gen Y customers is greater than among other generational groups.
  • Nearly one-half (49%) of all customers across generations say they "definitely will" recommend their current insurer to others, and half say they "definitely will" renew their policy.
  • On a regional basis, satisfaction with insurance providers is highest in the Texas region and lowest in the New England region.
  • Eight of the 11 regions evaluated in the study post major increases in customer satisfaction. The greatest improvements are in Florida and the Mid-Atlantic regions.
  • Two providers--Auto-Owners Insurance and State Farm--each rank highest in two of the 11 regions examined.*

1J.D. Power defines generational groups as Pre-Boomers (born before 1946); Boomers (1946-1964); Gen X (1965-1976); Gen Y (1977-1994); and Gen Z (1995-2004).

*New Jersey Manufacturers Insurance Company (NJM) and USAA achieve high levels of customer satisfaction in the study, but are not ranked because they have closed memberships.

Additional Research:

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