Category Archives: Customer Satisfaction

Fewer Auto Insurance Customers Shopping, But More Switching Insurer

While the percentage of auto insurance shoppers has reached a six-year low, the percentage of those shoppers who select a new insurer is at a six-year high, according to the just-released J.D. Power and Associates 2013 U.S. Insurance Shopping Study.

The study found that only 23 percent of auto insurance customers shopped for a new policy in the past 12 months, but 45 percent of those that did ultimately switched insurer.

J.D. Power notes that the proportion of insurance customers who shop has decreased from a high of 33 percent in 2011, while the switching rate among shoppers has steadily increased from a low of 33 percent in 2010.

The findings come as overall customer satisfaction with auto insurance companies has improved to an all-time high of 804 (on a 1,000 point scale) in 2012. Overall new buyer satisfaction with the auto insurance shopping experience averages 828 for the third consecutive year.

In a press release, Jeremy Bowler, senior director of the global insurance practice at J.D. Power and Associates says:

Unlike many other industries we measure, policy retention rates for personal auto insurance in the U.S. market average 90 percent. With customer satisfaction generally high and climbing, this industry has witnessed fewer customers shopping, but those who are shopping are serious about switching insurers.†

Another key takeaway from the study is that insurer websites are becoming increasingly important in the new-buyer purchase experience, increasing to 24 percent in 2013, up from 22 percent in 2012.

The call center representative is less influential among customers selecting a new insurer in 2013 (20 percent), compared with 2012 (22 percent), while the local agent remains as influential as in previous years.

As more shoppers are buying their insurance online, J.D. Power says it is vital that insurers provide a high-quality and effective Web experience, whether customers are accessing the site via a desktop computer, a tablet or a smartphone.

The study examines insurance shopping and purchase behavior and overall satisfaction among customers who recently purchased insurance across three factors (in order of importance): price, distribution channel, and policy offerings.

The 2013 U.S. Insurance Shopping Study is based on responses from more than 16,900 shoppers who requested an auto insurance price quote from at least one competitive insurer in the past 12 months.

Despite Storms, Property Claims Satisfaction Remains High

Despite a second consecutive year of historic storm losses in 2012, homeowners insurance customers remain highly satisfied with the property claims experience.

According to the just-released J.D. Power and Associates 2013 Property Claims Satisfaction study, overall satisfaction is 832 (on a 1,000 point scale), down just one point from last year’s study, but up from 823 in 2011 and 818 in 2010.

The study, now in its sixth year, measures satisfaction with the property claims experience among insurance customers who filed a claim for damages covered under their homeowners’ policy by examining five factors: settlement; first notice of loss; estimation process; service interaction; and repair process.

In a press release Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates, says:

Despite increases in both the frequency and average severity of property damage in the U.S. during the past two years, the fact that customer satisfaction remains high is a testament to how diligently the personal insurance industry has responded to its customers.†

Another key takeaway from the study is that satisfaction with the service interaction process declined by nine points in 2013, compared with 2012.

J.D. Power reports that much of that decline in satisfaction likely is due to the continuing trend of homeowners filing their claim via direct channels – typically online or by calling a call center – rather than through an agent.

Some 68 percent of customers file their recent homeowners claim through direct channels, up from 57 percent in 2012, but satisfaction is 50 points higher among customers who file a claim through their agent, than those who file a claim via direct channels.

The 2013 Property Claims Satisfaction study is based on more than 5,500 responses from homeowners insurance customers who filed a property claim between May 2011 and January 2013.

Faster Settlements Make for More Satisfied Auto Insurance Claimants

Customers are increasingly satisfied with their auto claims experience, as repairable and total loss claims are being paid faster, according to the J.D. Power and Associates 2013 U.S. Auto Claims Satisfaction Study—Wave 1.

Overall, claimant satisfaction with the auto claims process in the fourth quarter of 2012 increased by six points to 861 (on a 1,000-point scale) from the fourth quarter of 2011, primarily due to an 11-point increase in settlement satisfaction.

J.D. Power noted that slight increases in the ratings of fairness of the claim settlement and timing of the settlement, contributed to the improvement in settlement satisfaction.

The study finds that the average time to pay claimants decreased to 13.9 days in the fourth quarter of 2012, down from 16.4 days in the same period of 2011.

While the average time to pay claimants for a repairable claim (11.8 days) decreased by 1.3 days from the fourth quarter of 2011, the largest decrease is in the time it takes to pay total-loss claims, down by an average of 5.1 days to 18.5 days.

Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates, commented:

Regardless of the claim type, the faster the claimant is paid and can move forward with a repair or to replace their vehicle, the more likely they are to be satisfied.

In addition, satisfaction with the claims professional is at an all-time high, indicating that the process is becoming smoother, with more frequent updates throughout contributing to a much more satisfying experience.”

The study measures claimant satisfaction with the claims experience for auto physical damage loss. Depending on the complexity of the claim, a claimant may experience some or all of the following, which are measured in the study: first notice of loss; claim service interaction; damage appraisal; repair process; rental experience; and settlement.

The 2013 U.S. Auto Claims Satisfaction Study–Wave 1 is based on responses from more than 3,000 auto insurance customers who settled a claim within the past six months. It excludes claimants whose vehicle incurred only glass/windshield damage or was stolen, or who only filed roadside assistance claims.

Check out this  I.I.I. video  for five steps to follow to make the auto insurance claim process quicker and simpler.

Policy Bundling Drives Customer Satisfaction with Homeowners Insurance

Customer satisfaction with homeowners insurance companies reached an all-time high in 2012 due to policy bundling, according to an annual study by J.D. Power and Associates.

Its 2012 U.S. National Homeowners Insurance Study found that overall satisfaction with homeowners insurance companies averages 785 in 2012 (on a 1,000-point scale), a 16 point improvement from 2011, and the highest level in the history of the study.

In addition, J.D. Power found customer satisfaction improves by 19 points among customers who bundle their auto and homeowners policies with the same insurer, compared with an improvement of 10 points among customers who have their auto policy with another insurer.

In a press release Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates, says:

The increase in satisfaction with policy offerings is directly related to customer perceptions that insurers are doing a better job in offering the right coverage options at competitive prices when policies are bundled.†

The study finds a direct relationship between bundling any additional products and higher customer  satisfaction.

Satisfaction among customers who insure only their home with their homeowners insurer is 712. However, when one additional product is bundled (typically an auto policy), satisfaction increases to 792. When four or more products are bundled with the insurer, satisfaction further increases to 861.

Bundling also increases customers’ intent to renew their policy with the same insurer. Among customers who bundle two policies, 46 percent say they “definitely will” renew with their insurer, and this increases to 66 percent when four or more policies are bundled.

The J.D. Power  study measures customer satisfaction with homeowners insurance companies by examining five factors: billing and payment; claims; interaction; policy offerings; and price.

In 2012, customer satisfaction is higher in all five factors year over year, with the greatest gains in policy offerings (+35 points) and billing and payment (27 points).

According to J.D. Power, the gains in policy offerings are more pronounced among customers who bundle their auto and homeowners policies than among those who have their auto policy with another insurer: +39 points vs. +25 points, respectively.

The competitiveness of discounts and variety of coverage options are key differentiators among those customers who bundle their insurance, it adds.

The 2012 U.S. National Homeowners Insurance Study is based on responses from more than 12,600 homeowners insurance customers. The study was fielded between May and June 2012.

Check out I.I.I. facts+statistics on homeowners insurance.

Auto Insurance Claims Satisfaction Rebounds

More customers are satisfied with the auto claims experience in the second quarter of 2012 than   were in the first quarter, according to a report from J.D. Power and Associates.

The study, which is based on responses from more than 2,600 auto insurance customers who filed a physical damage claim within the past six months, found that overall customer satisfaction increased by 10 points (on a 1,000-point scale) to 852 in the second quarter of 2012.

Depending on the complexity of the claim, an individual may experience some or all of the following measured in the study: first notice of loss; claim service interaction; damage appraisal; repair process; rental experience; and settlement.

Satisfaction with settlement – the largest driver of increased satisfaction – is one of the most improved among the six factors, increasing by 12 points from the first quarter of 2012. Satisfaction in all factors increased in the second quarter, compared with the first quarter.

Settlement satisfaction falls significantly among claimants paying in excess of $300 above and beyond their deductible, according to J.D. Power, with satisfaction 89 index points lower than among those who pay only their insurance deductible.

So it’s important to note that the study found the amount paid out-of-pocket fell by $36 to an average of $218 in the second quarter of 2012, compared with the first quarter. Among the 21 percent of claimants who had an out-of-pocket expense, the percentage that spent more than $300 has decreased to 22 percent, compared with 25 percent in the first quarter.

Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates explains:

The amount spent out-of-pocket most definitely affects the perception of fairness of a settlement, further influencing satisfaction with the overall auto claims process. Additionally, the settlement factor is influenced highly by the clarity and thoroughness of the settlement explanation given to the customer by the insurance company. If the customer understands the process and what they are paying for, they tend to have higher satisfaction with their experience.†

The 2012 U.S. Auto Claims Satisfaction Study – Wave 3 excludes claimants whose vehicle only incurred glass/windshield damage or was stolen, or who only filed roadside assistance claims.

Check out I.I.I. facts and statistics on auto insurance.

Auto Insurance Customer Satisfaction At All-Time High

Overall customer satisfaction with auto insurance companies has reached an all-time high, led primarily by increases in satisfaction with policy offerings and billing and payment, according to the J.D. Power and Associates 2012 U.S. Auto Insurance Study.

Overall satisfaction with auto insurers reached 804 on a 1,000-point scale, up 14 points from 2011 and the highest since the study was launched in 2000.

That’s the headline of this year’s findings. However, J.D. Power and Associates’ analysis also provides some useful intelligence about how well customers tolerate rate hikes.

Basically, customers that are notified in advance and given options tolerate rate hikes well.

Among auto insurance customers who were notified prior to a rate increase and had a discussion with their insurer, satisfaction is 807. This compares with a satisfaction score of 746 among those customers who were not notified of the rate increase prior to the renewal notice.

The study finds that 20 percent of customers experienced an insurer-initiated rate increase from 2011, with 63 percent of these customers experiencing an increase of $50 or more. Satisfaction among customers whose premiums increase by at least $50 is 735, compared with 797 among those experiencing an increase of less than $50.

A press release quotes Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates:

Among 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.†

The study is based on nearly 35,000 responses from auto insurance customers and was fielded between March and May 2012.

Check out I.I.I. facts and statistics on auto insurance: costs and expenditures.

Homeowners Insurance: Customer Satisfaction Increases

As 2012 appears to be continuing the trend of heavy thunderstorm losses (hail and tornadoes) seen in 2011, the just-released 2012 U.S. Property Claims Satisfaction Study from J.D. Power and Associates makes for a timely read.

The study, which measures customer claims experiences based on homeowners claims filed during 2011, found that overall satisfaction in 2012 improves to 833 on a 1,000-point scale, an increase of 10 points from last year’s study.

The improvement comes despite the record number of storm losses seen in 2011, when there were 99 weather-related disasters in the U.S., 14 of which totaled more than $1 billion in damages each, according to the Insurance Information Institute (I.I.I.).

In a press release, Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates, says:

A period of tremendous volatility in the industry, caused by a large number of devastating storms, led us to anticipate that satisfaction would decline, but that clearly was not the case.†

And:

The industry as a whole did well in not only handling the day-to-day claims, but also the large volume of claims associated with those major events.†

Other key takeaways from the study, include the fact that high wind claims, which include tornado and hurricane damage, accounted for 33 percent of all claims filed, an increase from 21 percent in last year’s study.

Yet, among those who filed a claim for high wind damage, satisfaction remained stable, relatively unchanged with last year.

Claims experience by region shows mixed results, however. For example, satisfaction in the South Atlantic and Northeast regions, both of which had increase in high wind claims due to hurricanes in 2011, improved 36 points and 18 points respectively on the prior year’s study.

In contrast, overall satisfaction the East North Central Region, which also had an increase in high wind claims due to tornado damage, satisfaction declined by 14 points. The West South Central region which saw an increase in hail-related claims also saw an eight-point drop in satisfaction year over year.

Not surprisingly, the study finds that a positive claims experience fosters significantly higher long-term loyalty among claimants, while a negative claims experience may cause claimants to be more likely to switch insurers.

Check out I.I.I. facts and statistics on homeowners insurance and tips on how to file a homeowners claim.

Customer Satisfaction With Homeowners Insurance

The just released J.D. Power and Associates 2011 U.S. National Homeowners Insurance Study contains a number of interesting findings, but a couple of key takeaways really caught our attention.

For example, homeowners who carry sufficient insurance coverage to fully rebuild their homes in the event of a total loss are more satisfied with their insurer than those that don’t, the study found.

Approximately 16 percent of homeowners insurance policyholders indicate they carry less coverage than would be required to fully rebuild their home in the event of a total loss.

Among those policyholders, satisfaction averages 739 on a 1,000 point scale in 2011 – more than 40 points lower than among policyholders who say they have sufficient coverage.

J.D. Power notes that it is key for homeowners to ensure that their insurance coverage is sufficient before a disaster strikes.

While many homeowners may not give much thought to their insurance under normal circumstances, the moment they have to file a claim, the value of coverage becomes realized.

The study found  that customers who have filed a claim tend to be more knowledgeable about their policies – and also more satisfied – than those who haven’t had a claims experience.

Overall satisfaction with homeowners insurance companies averages 769 in 2011 – improving by 19 points from 2010, according to the study. While satisfaction improved in all five factors, the greatest gain was in the interaction factor.

This year’s study is based on responses from more than 9,100 homeowners insurance customers, fielded between April and July 2011.

Check out this I.I.I. video for tips on making sure you are  adequately insured.

Check out I.I.I. facts and stats on homeowners insurance.

Homeowners Claims: A Moment of Truth

Insurers that provide highly satisfying home insurance claim experiences are more likely to see increased customer retention and loyalty, according to a new study from J.D. Power and Associates.

Its 2010 U.S. Home Claims Satisfaction Study finds that among home insurers that provide highly satisfying claims experiences, 71 percent of their claimants indicate that they “definitely will† renew with their insurer and only 4 percent say they have switched insurers following their homeowners claim.

In comparison, among insurers with lower levels of satisfaction, only 53 percent of claimants say they plan to renew, while 10 percent say they have switched insurers. Fewer than one-half (48 percent) of these claimants say they “definitely will† recommend their insurer.

In a press release, Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates notes that suffering a property loss and filing a claim tends to be an emotionally charged experience – often more so than an auto claim.

As a result, the property claim represents a moment of truth for insurance claimants regarding their insurers, so it’s particularly important that the claims experience is handled in a a satisfying manner to ensure claimants remain with the insurer in the long run.†

The study finds that insurers performing key services, such as clearly explaining the claims process, giving claimants an expectation of how long the claim will take and ensuring claimants know who to contact with questions, may considerably improve satisfaction with the claims experience.

Among claimants who say that their insurer delivered on all of the top service practices, satisfaction averages 929 points, but drops to 650 among claimants whose insurers missed four or more of the top service practices

The study underscores an important point – insurers that clearly explain the claims process can make it easier and a lot less stressful for their customers.

To help demystify the claims-filing process, check out I.I.I. tips  on how to file a homeowners claim  and the I.I.I. video  Filing a Homeowners Insurance Claim: Six Steps.

Marginal Decline in P/C Customer Satisfaction

Customer satisfaction with the property/casualty insurance industry slipped a bit in the fourth quarter of 2009. According to the latest University of Michigan American Customer Satisfaction Index (ACSI), the p/c sector showed a slight drop of 1.2 percent to a score of 80 in Q4 2009. That said, several p/c insurers improved their customer relationships in 2009. Among property/casualty insurers, four of the five measured companies improved (with one steady), but the gains were all small. ACSI data indicates the decline in the industry overall is due to a 3 percent ACSI drop in the aggregate of all other smaller insurers, which are challenged to provide the same rates as their larger competitors, focusing instead on service. In the aggregate, customer satisfaction with the finance and insurance sector (including banks, credit unions, and property, life and health insurance) improved 1.4 percent to an ACSI score of 77.1. Even though some individual banks plunged in customer satisfaction, banks and credit unions as a whole were unchanged from a year ago with ACSI scores of 75 and 84, respectively. Life insurance posted a small improvement of 1.3 percent to a score of 79, while customer satisfaction with health insurance went up 2.7 percent to a record-high score of 75. The index measures customer expectations, perceived quality and perceived value of companies in various industries.