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Driving insurance satisfaction
Customer service trumps premiums, J.D. Power study shows
Customer service remains the most important driver for auto insurance making up 28 per cent of customer satisfaction, compared with 25 per cent for price/premium, according to a 2008 J.D. Power and Associates study.
Despite a high level of public scrutiny and industry focus on premiums, customer service overshadows price as the most important driver of satisfaction among auto and home insurance policyholders in Canada, according to the J.D. Power and Associates 2008 Canadian Home and Auto Insurance Customer Satisfaction Study.
The study finds that customer service accounts for 38 per cent of satisfaction among home insurance policyholders, while price/premium accounts for only 17 per cent.
Even among auto insurance policyholders, where premiums are higher and price sensitivity is greater, customer service remains the most important driver making up 28 per cent of customer satisfaction, compared with 25 per cent accounted for by price/premium.
“Property and casualty insurance has long been considered a commodity business, with most policies written through independent brokers and with heavy government regulation in auto insurance rates and coverage,” said Lubo Li, senior director of Canadian financial services and insurance at J.D. Power and Associates.
State Farm ranks highest in customer satisfaction among private full-coverage automotive insurance providers with a score of 757 on a 1,000-point scale, performing particularly well in customer service and billing/payment.
Belairdirect (749) and Johnson Insurance (736) follow in the rankings.
The study finds that among policyholders who have filed a claim with their primary auto insurer in the past three years, the importance of claim handling increases considerably to account for 41 per cent of overall satisfaction.
The study also finds that customer satisfaction benefits an insurer’s bottom line, as satisfied policyholders are more likely to renew their policy and to recommend their insurer to family and friends.
Auto insurance customers who say they are delighted (providing ratings of 10 on a 10-point scale) with their insurer report making an average of six positive recommendations during the past 12 months, while dissatisfied policyholders (providing ratings of 4 or less) report making 12 negative comments about their insurer during the same period, on average.
The study finds that customer service accounts for 38 per cent of satisfaction among home insurance policyholders, while price/premium accounts for only 17 per cent.
Even among auto insurance policyholders, where premiums are higher and price sensitivity is greater, customer service remains the most important driver making up 28 per cent of customer satisfaction, compared with 25 per cent accounted for by price/premium.
“Property and casualty insurance has long been considered a commodity business, with most policies written through independent brokers and with heavy government regulation in auto insurance rates and coverage,” said Lubo Li, senior director of Canadian financial services and insurance at J.D. Power and Associates.
State Farm ranks highest in customer satisfaction among private full-coverage automotive insurance providers with a score of 757 on a 1,000-point scale, performing particularly well in customer service and billing/payment.
Belairdirect (749) and Johnson Insurance (736) follow in the rankings.
The study finds that among policyholders who have filed a claim with their primary auto insurer in the past three years, the importance of claim handling increases considerably to account for 41 per cent of overall satisfaction.
The study also finds that customer satisfaction benefits an insurer’s bottom line, as satisfied policyholders are more likely to renew their policy and to recommend their insurer to family and friends.
Auto insurance customers who say they are delighted (providing ratings of 10 on a 10-point scale) with their insurer report making an average of six positive recommendations during the past 12 months, while dissatisfied policyholders (providing ratings of 4 or less) report making 12 negative comments about their insurer during the same period, on average.
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