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Satisfaction with U.S. Auto Insurance Providers Sets New Record

Satisfaction with U.S. Auto Insurance Providers Sets New Record

By Jeff Youngs, June 26, 2012
Overall customer satisfaction with auto insurance companies has reached an all-time high, mainly due to increases in satisfaction with policy offerings, which are differentiated in the packaging of offerings and discounts advertised, as well as in improvements in billings and payment, according to our 2012 U.S. Auto Insurance Study, which is based on nearly 35,000 responses from auto insurance customers.

At the industry level, satisfaction with auto insurance companies climbs to 804 (on a 1,000-point scale), up 14 points from 2011. Customer satisfaction rises significantly in four of five factors measured, with the largest improvements in policy offerings and interaction with the provider. Satisfaction with price, the fifth factor measured in our study, remains consistent with its score in 2011.

This year's study finds that 20% of customers have experienced an insurer-initiated rate increase from 2011, with nearly two-thirds (63%) of customers experiencing an increase of $50 or more. Satisfaction among customers whose premiums increased by at least $50 is 735, which is 62 points below the average of those respondents experiencing an increase of less than $50.

Proactive Communication Can Offset Customer Dissatisfaction
Among those 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 offset 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 even have a positive effect on satisfaction. Among those auto insurance customers receiving a rate increase, 56% were not notified prior to the renewal notice, and satisfaction averaged 746. In contrast, satisfaction among customers who were notified before a rate increase--and who had a discussion with their insurer--the satisfaction score increased by 61 points to 807.

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