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2018 U.S. Auto Insurance Study: Auto Insurance Customer Satisfaction Reaches Record High

2018 U.S. Auto Insurance Study: Auto Insurance Customer Satisfaction Reaches Record High

By Joseph Dobrian, June 15, 2018

Improved communications, and greater satisfaction with insurer/customer interactions, appear to be responsible for a recent rise in customer satisfaction with their auto insurance carriers, according to the J.D. Power 2018 U.S. Auto Insurance Study.SMThis increase in satisfaction comes despite steadily increasing insurance premiums, as insurers offer a more pleasing mixture of digital and live interactions that keep customers engaged across all channels.

“Cost is not the sole indicator of customer satisfaction in the auto insurance industry,” said Robert Lajdziak, Insurance Practice Business Consultant at J.D. Power. “Low prices may attract new customers, but it’s service that keeps them. The auto insurers that increase customer satisfaction across all facets of the customer experience make price just one part of the overall relationship.”

Customers apparently use digital interaction channels on an increased basis, particularly for monthly billing. This, according to the study, has played a major role in driving higher levels of satisfaction.

“Customer satisfaction is at its highest when customers take care of transactions themselves and save the high-value interactions for live channels,” Lajdziak said. “However, the increasing demand and use of digital self-service options is putting pressure on agents to evolve their value proposition to offer more products and services to help customers with complex needs and risks.”

Key Findings
Overall customer satisfaction with U.S. auto insurers improves in 2018, according to the study, and is now at a record-high level of 826 (on a 1,000-point scale). This increase in customer satisfaction correlates inversely with a decline in auto insurance shopping rates, which have reached a record low. Following are some of the other key findings of the 2018 study:
  • Insurers delivering strong omnichannel experience: Customer satisfaction improves across all factors measured in the study, with the biggest gains in billing process and policy information (+11 points); policy offerings (+10); price (+6); and interaction (+3). The gain in the billing process and policy information factor is partly driven by increased satisfaction with electronic statements and monthly billing.
  • Preference for digital interaction channels grows: Overall satisfaction tends to be highest when customers interact via a mix of online and offline methods of communication. The preference for digital forms of communication is greatest for low touch-point interactions, such as verifying payment receipt (73% of those surveyed prefer a digital interation); making payment (70% digital preference); and ordering proof of insurance cards (66% digital preference).
  • Transparency is key when premiums rise: When an insurer-initiated premium increase is upcoming, it is important to communicate that increase before it happens. When customers are pre-notified of a premium increase, overall satisfaction is 797. When they are not notified—which happens 49% of the time—overall satisfaction drops 49 points to 748.
  • Usage-based insurance programs grow significantly: Usage-based insurance programs, which leverage telematics technology to set insurance premiums based on how far and how safely a customer drives, are gaining converts. This year, 10% of insurance customers indicate participating in usage-based insurance programs, up from 8% in 2016 and 2017. Obtaining a discount is the most commonly cited reason for participating in a usage-based program. However, other motivators include speeding alerts, vehicle tracking, and driver coaching, and these are gaining importance among customers currently using such programs.

Study Rankings
Following are the highest-ranked auto insurance brands by region:

California: Ameriprise
Central: Shelter
Florida: MetLife
Mid-Atlantic: Erie Insurance
New England: Amica Mutual
New York: New York Central Mutual
North Central: Auto-Owners Insurance
Northwest: PEMCO Insurance
Southeast: Farm Bureau Insurance—Tennessee
Southwest: CSAA Insurance Group
Texas: Texas Farm Bureau

Consumer Tips
Based on the study, J.D. Power offers the following tips:

  • Online transactions are apparently much easier nowadays than a few years ago, so if your insurer offers them as an alternative to interactions by phone or mail, take full advantage.
  • Shop online for new products, services, and options. Even if you usually interact face-to-face with your insurance agent, it pays to do your homework beforehand.
  • Stay current with your insurers’ rates and products compared with those of competing insurers, but rely on your insurance agent to explain any ambiguities.
  • Use online interactions to anticipate any changes in your policy, or your insurability.

About the Study
The 2018 U.S. Auto Insurance Study examines customer satisfaction in five factors (in order of importance): interaction; policy offerings; price; billing process and policy information; and claims. The study is based on responses from 44,622 auto insurance customers and was fielded from February-April 2018.

Additional Research:

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