Auto Insurance Customer Satisfaction Reaches Record High, J.D. Power Finds

COSTA MESA, Calif., June 14, 2018 /PRNewswire/ -- Despite steadily increasing premiums, auto insurance customers are more satisfied with their carriers than ever. The reason? According to the J.D. Power 2018 U.S. Auto Insurance Study,(SM) released today, insurers are beginning to get the customer interaction formula right, offering a mix of digital and live interactions that keep customers engaged with their brands 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."

More frequent use of digital interaction channels--particularly for monthly billing--also 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."

Following are some of the key findings of the 2018 study:

    --  Record-high customer satisfaction breeds loyalty: Overall customer
        satisfaction with U.S. auto insurers improves in 2018 and is now at a
        record-high level of 826 (on a 1,000-point scale). This increase in
        customer satisfaction is inversely correlated with a decline in auto
        insurance shopping rates, which have reached a record low.(1)
    --  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% digital preference); making payment (70%
        digital preference); and ordering proof of insurance cards (66% digital
        preference).
    --  Transparency is key when premium increases are introduced: When there is
        an insurer-initiated premium increase, it is important to communicate
        that an increase is coming. 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. While the
        most common reason for participating in a usage-based program is to
        obtain a discount, speeding alerts, vehicle tracking and driver coaching
        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

All regional rankings are available online at http://www.jdpower.com/pr-id/2018084.

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.

For more information about the U.S. Auto Insurance Study, visit
http://www.jdpower.com/resource/jd-power-us-auto-insurance-satisfaction-study.

J.D. Power is a global leader in consumer insights, advisory services and data and analytics. These capabilities enable J.D. Power to help its clients drive customer satisfaction, growth and profitability. Established in 1968, J.D. Power is headquartered in Costa Mesa, Calif., and has offices serving North/South America, Asia Pacific and Europe. J.D. Power is a portfolio company of XIO Group, a global alternative investments and private equity firm headquartered in London, and is led by its four founders: Athene Li, Joseph Pacini, Murphy Qiao and Carsten Geyer.

Media Relations Contacts
Geno Effler; Costa Mesa, Calif.; 714-621-6224; media.relations@jdpa.com
John Roderick; St. James, N.Y.; 631-584-2200; john@jroderick.com

About J.D. Power and Advertising/Promotional Rules www.jdpower.com/about-us/press-release-info

(1) J.D. Power 2018 U.S. Insurance Shopping Study(SM)

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SOURCE J.D. Power