2014 U.S. Auto Insurance Study Results
By Jeff Youngs, June 24, 2014
Despite premiums rising steadily across the industry, vehicle owner satisfaction with auto insurers reaches record high levels, according to the just-published J.D. Power 2014 U.S. Auto Insurance Study.SM The study measures customer satisfaction across five factors (interaction, price, policy offerings, billing and payment, and claims).
Overall satisfaction with auto insurance companies increases by 16 points in this year's study--to 810 on a 1,000-point scale--which is the highest increase since the inception of the study in 2000. The satisfaction milestone comes at a time when premiums have been trending up for the past few years.
"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."
One of the study's key findings is that customer loyalty and advocacy are improving. More than half (51%) of customers say they "definitely will" renew their auto insurance policy with their current provider, compared with 49% in 2013. Additionally, 49% of customers say they "definitely will" recommend their insurer to family and friends in 2014, an increase from 48% in 2013.
When analyzing insurance customers by attitudinal and preference-based segmentation, overall satisfaction is highest among Loyal Advice Seekers (867)--customers who are the least likely to shop for a new policy or switch carriers due to a strong relationship with their agent. Satisfaction is lowest among Unengaged customers (742)--those who have little if any relationship with their insurer. Among Technologists--customers who prefer to interact through technology--more than 60% have interacted with their insurer in the past 12 months through digital channels, such as their carrier's website and social media, and 40% have communicated exclusively via digital channels.
Most of the improvement this year at the insurer level comes from smaller insurers. In aggregate, the 20 largest insurers, based on the amount of written premiums, improve by 10 points in 2014, compared with 2013, while the smallest insurersthose outside of the largest 30improve by 41 points.
Satisfaction varies regionally from a high of 820 in the Texas and Central regions to a low of 795 in the California and New England regions. Ten of the 11 study regions post significant double-digit increases in insurer performance in 2014, with the largest improvements in the New York (+29 points) and New England (+26) regions. Top performers in each region are as follows:
- Wawanesa (852)
- Ameriprise (824)
- Auto Club of Southern California Insurance Group (822)
- Auto-Owners Insurance (853)
- Shelter (844)
- State Farm (830)
- The Hartford (827)
- Auto-Owners Insurance (815)
- Progressive (811)
- The Hartford (833)
- Erie Insurance (830)
- GEICO and State Farm tie for third (809)
- Amica Mutual (868)
- State Farm (833)
- Nationwide (814)
- GEICO and State Farm tie for first place (822)
- New York Central Mutual (811) ranks third
- Auto-Owners Insurance (840)
- State Farm (829)
- Grange Insurance (826)
- PEMCO Insurance (854)
- The Hartford (834)
- State Farm (829)
- Tennessee Farm Bureau (844)
- North Carolina Farm Bureau (843)
- Auto-Owners Insurance (839)
- State Farm (836)
- Liberty Mutual and The Hartford tie for second (820)
- Texas Farm Bureau Insurance (852)
- Allstate (830)
- State Farm (826)
New Jersey Manufacturers Insurance Company (NJM) and USAA also achieve high levels of customer satisfaction in the study, although they are not included in the rankings due to the closed nature of their respective memberships.
Based on the study, J.D. Power offers the following consumer tips:
- Develop a relationship with your insurance agent, such that you'll be kept informed in advance of new services, options, premium increases, and other changes.
- Compare your policy with competing policies each year, before you renew.
- If you find a better deal but have a good relationship with your current agent, see if your insurer can match the deal.
- If you relocate to another state, be sure you know about any changes you'll have to make with regard to your insurer and the cost of your policy.
About the Study
The 2014 U.S. Auto Insurance Study is based on responses from 44,661 auto insurance customers. J.D. Power collected the survey data in March and April 2014.