J.D. Power and Associates Reports: Customer Satisfaction with Auto Insurance Companies Declines Considerably from 2009

Amica Mutual Ranks Highest among Auto Insurers for an 11th Consecutive Year

Aug 03, 2010, 11:12 ET from J.D. Power and Associates

WESTLAKE VILLAGE, Calif., Aug. 3 /PRNewswire/ -- After peaking in 2009, overall customer satisfaction with insurance companies has declined significantly in 2010, according to the J.D. Power and Associates 2010 U.S. National Auto Insurance Study(SM) released today. Overall customer satisfaction averages 777 on a 1,000-point scale, decreasing by 10 points from 2009(1).

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The study measures customer satisfaction with auto insurance companies across five factors: interaction; policy offerings; billing and payment; price; and claims. The decline in overall customer satisfaction in 2010 is largely attributable to declining satisfaction with price, which has decreased by more than 30 index points compared with 2009. At the same time, price has also gained in relative importance as a driver of overall satisfaction.

The study finds the proportion of customers who report experiencing an increase in premiums has increased significantly to 22 percent in 2010, compared with 17 percent in 2009. In addition, six in ten policyholders who have experienced a premium increase indicate they received no advance notice of the change from their insurers.

"Now that the market has stabilized, consumers are feeling more in control of their finances and have become more aware of and sensitive to the rate increases that have started to occur since the recent recessionary period," said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates. "As a result, customers are considerably less satisfied with their insurer and their rates, and have begun shopping for new insurers at unprecedented high levels not seen since prior to the recession."

Amica Mutual ranks highest in customer satisfaction with auto insurance companies for an 11th consecutive year with a score of 849. Erie Insurance (815) and Auto-Owners Insurance (813) follow in the rankings. New Jersey Manufacturers Insurance Company (NJM) and USAA also achieve high levels of customer satisfaction, although they are not included in the rankings due to the closed natures of their respective memberships.(2)

The study also finds the following key trends among Generation Y (Gen Y) auto insurance customers (those born between 1977 and 1994):

  • Gen Y customers tend to be more critical of their insurance providers, compared with consumers in other generational groups, particularly regarding the ease of contacting a representative and receiving clear explanations of their insurance policies.
  • Baby Boomers (those born between 1946 and 1964) tend to place a great deal of importance on traditional communications from their insurer, such as a new customer welcome kits, newsletters and magazines. Meanwhile, Gen Y customers are more concerned with being able to access their policy information online.
  • While website usage among Baby Boomers is increasing, 40 percent of Baby Boomers report using their insurer's website to review or make changes to their policies, compared with 60 percent of Gen Y customers.

While use of insurer websites continues to increase, other interaction channels—such as mobile phones—are beginning to emerge, with both agent-based and direct insurers rapidly introducing smartphone applications into the market.  According to the J.D. Power Insurance Intelligence Monitor, insurance customers—particularly Gen Y customers—are apt to use mobile phone apps that keep their needs in mind, such as the Nationwide "accident toolkit" or the USAA app that allows users to display their policy information during a traffic stop.

"This type of functionality goes beyond simple information delivery—it involves providing real tools and services customers need, use and appreciate," said Bowler. "It's likely that these value-added apps could contribute to brand loyalty—and even the creation of brand ambassadors."

For an in-depth examination of Gen Y auto insurance customer service expectations and how individual insurers are competing for this growing segment of the market, read "Keeping Millennials for Life: Tailoring Service to Meet the Unique Needs of Generation Y Customers," available by clicking here.

The 2010 U.S. National Auto Insurance Study is based on more than 25,000 responses from auto insurance policyholders. The study was fielded in February and March 2010.

Customer Satisfaction Index Ranking


J.D. Power.com Power Circle Ratings

(Based on a 1,000-point scale)


For Consumers

Amica Mutual

849

5




Erie Insurance

815

4

Auto-Owners Insurance

813

4

Shelter

807

4

State Farm

795

4

GEICO

793

4




Liberty Mutual

785

3

American Family

784

3

COUNTRY

782

3

Alfa Insurance

781

3

Ameriprise

779

3

Automobile Club of Southern California

777

3

Industry Average

777

3

Progressive

775

3

Kemper

771

3

State Auto

771

3

The Hartford

771

3

Grange

770

3

Allstate

768

3

Travelers

768

3

Automobile Club Group

766

3

Safeco

763

3

Esurance

759

3

Nationwide

759

3

California State Automobile Association

758

3

Farmers

757

3




GMAC

751

2

MetLife

749

2

Mercury

747

2

Encompass

745

2

The Hanover

744

2

21st Century

739

2

Commerce

726

2




*USAA

899

5

**NJM Insurance Co.

849

5



*USAA is an insurance provider open only to U.S. military personnel and their families and therefore is not included in the rankings.

**New Jersey Manufacturers Insurance Co. is an insurance provider open only to New Jersey Business & Industry Association members, State of New Jersey employees, NJM's previously insured drivers, and/or previous/current auto/homeowner policyholders and therefore is not included in the rankings.

Included in the study but not ranked due to small sample size or localized availability are: American National Property & Casualty (ANPAC); Arbella; CHUBB; Direct General; Farm Bureau Mutual Group, Horace Mann; Infinity P & C; Kentucky Farm Bureau; North Carolina Farm Bureau; Tennessee Farm Bureau; Safety Insurance; and Westfield.

Power Circle Ratings Legend:

5 – Among the best

4 – Better than most

3 – About average

2 – The rest



About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company operating in key business sectors including market research, forecasting, performance improvement, Web intelligence and customer satisfaction.  The company's quality and satisfaction measurements are based on responses from millions of consumers annually.  For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies

Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a global information and education company providing knowledge, insights and analysis in the financial, education and business information sectors through leading brands including Standard & Poor's, McGraw-Hill Education, Platts, and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2009 were $5.95 billion. Additional information is available at http://www.mcgraw-hill.com/.  

Media Relations Contacts:

John Tews; J.D. Power and Associates; Troy, Mich.; (248) 312-4119; media.relations@jdpa.com

Jeff Perlman; Brandware Public Relations; Westlake Village, Calif.; (805) 418-8626; jperlman@brandwaregroup.com

No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power and Associates. www.jdpower.com/corporate

(1) Due to a change in study methodology, scores for 2009 results have been restated to allow for trending with 2010 scores.

(2) USAA is an insurance provider open only to U.S. military personnel and their families. New Jersey Manufacturers Insurance Company is open only to New Jersey Business & Industry Association members, State of New Jersey employees, NJM's previously insured drivers and/or previous/current auto/homeowner policyholders.

SOURCE J.D. Power and Associates



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