Large U.S. Auto Insurers Drag Industrywide Customer Satisfaction Down Due to Price Perception, Says J.D. Power
DETROIT, June 20, 2016 /PRNewswire/ -- After improving in each of the past two years, a decline in satisfaction among the nation's largest auto insurers is driving overall industry satisfaction downward as customers react negatively to the perception of price increases, according to the J.D. Power 2016 U.S. Auto Insurance Study,SM released today.
The study examines customer satisfaction in five factors (in order of importance): interaction; policy offerings; price; billing process and policy information (formerly billing and payment); and claims. Satisfaction is measured on a 1,000-point scale.
Price Perception Drives Satisfaction Downward
Overall satisfaction declines by a significant 7 points to 811 from 818 in 2015. The 17 largest insurers,1 among whom satisfaction drops by 7 index points from 2015, are the primary drivers of the overall decline. Comparatively, satisfaction among the smaller insurers increases 1 point from 2015. The overall decline is largely influenced by a 3-point decrease in price satisfaction, which is attributable to a year-over-year 2-percentage-point decline in the percentage of customers who say they have not experienced a premium increase in the past 12 months. However, the perception among some customers is that they have had an insurer-initiated increase, even though they have not experienced a specific incident or life change that could account for the price hike.
Small Insurers Pull Ahead of Large Insurers
According to the study, this year marks the first time in the past 6 years that small insurers achieve a higher satisfaction score than large insurers (815 vs. 814, respectively). More positive perceptions of price have helped drive the differing performances between the two groups, as the price factor is the largest advantage small insurers have over large insurers. In contrast, large insurers perform higher in digital interactions—website and assisted online—as they have greater resources to continuously invest in improving their websites and staffing for assisted online.
"Price perception among customers of smaller insurers is likely influenced by the fact that they frequently select their insurer with the help of an independent agent," said Greg Hoeg, vice president of the U.S. insurance operations at J.D. Power. "Smaller insurers benefit from the personal interactions provided by their agency force, including their ability to educate customers about the value their policy provides."
Interaction Still Problematic
Among the five factors measured in the study, interaction and policy offerings are the primary drivers of the overall decline in customer satisfaction. Lower levels of satisfaction with the call center representative (down 6 points to 839) and the local agent (down 7 points to 864) drive the decline in satisfaction in the interaction factor. The decline in satisfaction with policy offerings (down by 8 points to 809) is due in part to insurers' failure to make it easy for customers to work with them.
Customers also provide lower ratings year over year for service elements, including the ease of making changes to an existing policy and ease of obtaining a new policy, suggesting that insurers haven't been able to move the needle when it comes to making changes more convenient for their customers.
Assisted Online Interaction Improves
Notably, satisfaction with assisted online interactions improves across all elements of the customer experience, including the promptness in communicating with a representative and timely resolution of problems, questions or requests. Additionally, the courtesy, knowledge, and overall concern for customer needs on the part of the representative assisting them also contribute to the improvement. Assisted online interactions consist of experiences in which a customer may have first visited their insurer's website to resolve an issue or question and was later further assisted by a representative via a chat feature.
"Insurance customers want their billing problems, policy questions or claims resolved efficiently," said Hoeg. "Today, more and more customers are interested in communicating via digital channels. Insurers should take note that the traditional call center representative may no longer be the most efficient and satisfying way to resolve an issue, even a complex one."
Satisfaction Drives Loyalty
Among delighted auto insurance customers (overall satisfaction scores of 900 and above), 75% say they "definitely will" renew their policy, compared with just 12% of displeased customers (scores of 549 and lower).
Regional Overview
Satisfaction varies regionally, from a high of 825 in the Southeast region to a low of 795 in the New England region. Seven of the 11 study regions post significant decreases in overall satisfaction year over year, with the greatest declines occurring in the Southwest (-20 points) and Texas (-17) regions.
Following are the highest-ranked auto insurance brands by region:
California: Ameriprise (846)
Central: Shelter Insurance (819)
Florida: The Hartford (834)
Mid-Atlantic: Erie Insurance (829)
New England: Amica Mutual (855)
New York: GEICO (828)
North Central: Auto-Owners Insurance (842)
Northwest: PEMCO Insurance (847)
Southeast: Farm Bureau Insurance – Tennessee (870)
Southwest: The Hartford (829)
Texas: Texas Farm Bureau Insurance (836)
| Study Rankings by Region |
||
| Overall Customer Satisfaction Index Scores |
J.D. Power.com Power Circle Ratings |
|
| (Based on a 1,000-point scale) |
For Consumers |
|
| California Region |
||
| Ameriprise |
846 |
5 |
| Wawanesa |
838 |
4 |
| Auto Club of Southern California Insurance Group |
825 |
4 |
| State Farm |
823 |
4 |
| The Hartford |
810 |
4 |
| GEICO |
807 |
3 |
| CSAA Insurance Group |
802 |
3 |
| 21st Century |
801 |
3 |
| California Regional Average |
801 |
3 |
| Allstate |
798 |
3 |
| Nationwide |
797 |
3 |
| Progressive |
796 |
3 |
| Liberty Mutual |
792 |
3 |
| Farmers |
791 |
3 |
| Safeco Insurance |
791 |
3 |
| Esurance |
788 |
2 |
| Mercury |
781 |
2 |
| *USAA |
886 |
|
| *USAA is an insurance provider open only to U.S. military personnel and their families, and |
||
| Included in the study but not ranked due to sample size are Infinity P&C, MAPFRE Insurance, |
||
| State included in region is California. |
||
| Central Region |
||
| Shelter |
819 |
5 |
| The Hartford |
816 |
5 |
| State Farm |
816 |
5 |
| Safeco Insurance |
815 |
4 |
| American Family |
814 |
3 |
| Progressive |
814 |
3 |
| Central Regional Average |
811 |
3 |
| GEICO |
809 |
3 |
| Auto-Owners Insurance |
804 |
2 |
| Liberty Mutual |
802 |
2 |
| Auto Club of Southern California Insurance Group |
801 |
2 |
| Travelers |
801 |
2 |
| Farmers |
798 |
2 |
| Allstate |
789 |
2 |
| Farm Bureau Mutual |
786 |
2 |
| Nationwide |
786 |
2 |
| *USAA |
888 |
|
| *USAA is an insurance provider open only to U.S. military personnel and their families, and |
||
| Included in the study but not ranked due to sample size is Automobile Club Group. |
||
| States included in region are Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North |
||
| Florida Region |
||
| The Hartford |
834 |
5 |
| GEICO |
821 |
4 |
| Liberty Mutual |
820 |
4 |
| Florida Regional Average |
813 |
3 |
| MetLife |
812 |
3 |
| Progressive |
812 |
3 |
| Allstate |
809 |
3 |
| Esurance |
809 |
3 |
| State Farm |
802 |
2 |
| Travelers |
798 |
2 |
| Auto-Owners Insurance |
796 |
2 |
| Safeco Insurance |
793 |
2 |
| Nationwide |
790 |
2 |
| 21st Century |
781 |
2 |
| *USAA |
893 |
|
| *USAA is an insurance provider open only to U.S. military personnel and their families, and |
||
| Included in the study but not ranked due to sample size are Amica Mutual, Direct General, |
||
| State included in region is Florida. |
||
| Mid-Atlantic Region |
||
| Erie Insurance |
829 |
5 |
| The Hartford |
817 |
3 |
| Mid-Atlantic Regional Average |
817 |
3 |
| Allstate |
810 |
3 |
| Nationwide |
809 |
3 |
| Plymouth Rock Assurance |
809 |
3 |
| State Farm |
809 |
3 |
| CSAA Insurance Group |
808 |
3 |
| GEICO |
806 |
2 |
| Travelers |
805 |
2 |
| Progressive |
798 |
2 |
| 21st Century |
785 |
2 |
| Liberty Mutual |
783 |
2 |
| *USAA |
895 |
|
| **NJM Insurance Co |
862 |
|
| *USAA is an insurance provider open only to U.S. military personnel and their families, and |
||
| **NJM Insurance Co. is an insurance provider open only to New Jersey Business & Industry |
||
| Included in the study but not ranked due to sample size are Amica Mutual, Esurance, MetLife, and |
||
| States included in region are Delaware, District of Columbia, Maryland, New Jersey, Pennsylvania, |
||
| New England Region |
||
| Amica Mutual |
855 |
5 |
| Allstate |
815 |
4 |
| Nationwide |
807 |
4 |
| GEICO |
804 |
3 |
| Progressive |
799 |
3 |
| Plymouth Rock Assurance |
798 |
3 |
| New England Regional Average |
795 |
3 |
| Liberty Mutual |
794 |
3 |
| The Hartford |
792 |
3 |
| State Farm |
792 |
3 |
| Travelers |
786 |
3 |
| Safety Insurance |
783 |
3 |
| Arbella |
781 |
3 |
| MAPFRE Insurance |
776 |
2 |
| MetLife |
773 |
2 |
| Safeco Insurance |
771 |
2 |
| The Hanover |
765 |
2 |
| *USAA |
894 |
|
| *USAA is an insurance provider open only to U.S. military personnel and their families, and |
||
| States included in region are Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, |
||
| New York Region |
||
| GEICO |
828 |
5 |
| State Farm |
813 |
3 |
| Nationwide |
812 |
3 |
| New York Regional Average |
812 |
3 |
| New York Central Mutual |
808 |
3 |
| Allstate |
802 |
2 |
| MetLife |
801 |
2 |
| Travelers |
797 |
2 |
| The Hartford |
795 |
2 |
| Progressive |
793 |
2 |
| Liberty Mutual |
787 |
2 |
| *USAA |
888 |
|
| *USAA is an insurance provider open only to U.S. military personnel and their families, and |
||
| Included in the study but not ranked due to sample size are Amica Mutual, and Erie Insurance. |
||
| State included in region is New York. |
||
| North Central Region |
||
| Auto-Owners Insurance |
842 |
5 |
| COUNTRY Financial |
839 |
5 |
| The Hartford |
819 |
4 |
| State Farm |
815 |
3 |
| Erie Insurance |
810 |
3 |
| American Family |
809 |
3 |
| Grange Insurance |
809 |
3 |
| North Central Regional Average |
808 |
3 |
| Farmers |
806 |
3 |
| Nationwide |
805 |
3 |
| Allstate |
804 |
3 |
| Liberty Mutual |
800 |
3 |
| Automobile Club Group |
795 |
3 |
| GEICO |
794 |
3 |
| Progressive |
793 |
2 |
| MetLife |
788 |
2 |
| The Hanover |
782 |
2 |
| Safeco Insurance |
776 |
2 |
| Esurance |
769 |
2 |
| *USAA |
895 |
|
| *USAA is an insurance provider open only to U.S. military personnel and their families, and |
||
| Included in the study but not ranked due to sample size is Michigan Farm Bureau. |
||
| States included in region are Illinois, Indiana, Michigan, Ohio, and |
||
| Northwest Region |
||
| PEMCO Insurance |
847 |
5 |
| The Hartford |
806 |
3 |
| GEICO |
804 |
3 |
| Northwest Regional Average |
803 |
3 |
| Progressive |
802 |
3 |
| State Farm |
796 |
3 |
| Farmers |
795 |
3 |
| American Family |
792 |
3 |
| Liberty Mutual |
792 |
3 |
| Allstate |
790 |
3 |
| Safeco Insurance |
784 |
2 |
| Nationwide |
766 |
2 |
| *USAA |
888 |
|
| *USAA is an insurance provider open only to U.S. military personnel and their families, and |
||
| Included in the study but not ranked due to sample size is COUNTRY Financial. |
||
| States included in region are Idaho, Montana, Oregon, Washington, and |
||
| Southeast Region |
||
| Farm Bureau Insurance – Tennessee |
870 |
5 |
| Alfa Insurance |
841 |
4 |
| Kentucky Farm Bureau |
837 |
4 |
| Auto-Owners Insurance |
830 |
3 |
| GEICO |
830 |
3 |
| North Carolina Farm Bureau |
827 |
3 |
| State Farm |
825 |
3 |
| Southeast Regional Average |
825 |
3 |
| Nationwide |
822 |
3 |
| Allstate |
814 |
3 |
| National General |
812 |
3 |
| Progressive |
810 |
3 |
| MetLife |
804 |
2 |
| Liberty Mutual |
803 |
2 |
| Travelers |
799 |
2 |
| Safeco Insurance |
782 |
2 |
| *USAA |
893 |
|
| *USAA is an insurance provider open only to U.S. military personnel and their families, and |
||
| Included in the study but not ranked due to sample size are COUNTRY Financial, Erie Insurance, |
||
| States included in region are Alabama, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, |
||
| Southwest Region |
||
| The Hartford |
829 |
5 |
| American Family |
817 |
4 |
| Liberty Mutual |
813 |
4 |
| State Farm |
811 |
4 |
| GEICO |
806 |
3 |
| Southwest Regional Average |
804 |
3 |
| Safeco Insurance |
791 |
2 |
| Allstate |
785 |
2 |
| Progressive |
782 |
2 |
| Farmers |
781 |
2 |
| CSAA Insurance Group |
772 |
2 |
| *USAA |
890 |
|
| *USAA is an insurance provider open only to U.S. military personnel and their families, and |
||
| Included in the study but not ranked due to sample size are Auto-Owners Insurance, Farm Bureau |
||
| States included in region are Arizona, Colorado, Nevada, New Mexico, |
||
| Texas Region |
||
| Texas Farm Bureau |
836 |
5 |
| Allstate |
829 |
4 |
| State Farm |
829 |
4 |
| Farmers |
818 |
3 |
| Progressive |
818 |
3 |
| Texas Regional Average |
815 |
3 |
| Auto Club of Southern California Insurance Group |
813 |
3 |
| GEICO |
804 |
2 |
| Liberty Mutual |
798 |
2 |
| Nationwide |
791 |
2 |
| *USAA |
890 |
|
| *USAA is an insurance provider open only to U.S. military personnel and their families, and |
||
| Included in the study but not ranked due to sample size are Amica Mutual, and MetLife. |
||
| State included in region is Texas. |
||
Power Circle Ratings Legend
5 – Among the best
4 – Better than most
3 – About average
2 – The rest
New Jersey Manufacturers Insurance Company (NJM) and USAA also achieve high levels of customer satisfaction in the study, although they are not included in the rankings due to the closed nature of their respective memberships.
| Award-Eligible Auto Insurance Companies Included in the Study |
||
| Company Name |
CEO Name |
Company Address |
| 21st Century |
Jeffrey Dailey |
Woodland Hills, Calif. |
| Alfa Insurance |
Jimmy Parnell |
Montgomery, Ala. |
| Allstate |
Thomas Wilson |
Northbrook, Ill. |
| American Family |
Jack Salzwedel |
Madison, Wis. |
| Ameriprise |
Ken Ciak |
De Pere, Wis. |
| Amica Mutual |
Robert DiMuccio |
Lincoln, R.I. |
| Arbella |
John F. Donohue |
Quincy, Mass. |
| Auto Club of Southern California Insurance Group |
Robert Bouttier |
Los Angeles, Calif. |
| Automobile Club Group |
Joseph Richardson, Jr. |
Dearborn, Mich. |
| Auto-Owners Insurance |
Jeffrey Harrold |
Lansing, Mich. |
| COUNTRY Financial |
Kurt Bock |
Bloomington, Ill. |
| CSAA IG (AAA) |
Paula Downey |
Walnut Creek, Calif. |
| Encompass |
Mark Green |
Northbrook, Ill. |
| Erie Insurance |
Terrence Cavanaugh |
Erie, Pa. |
| Esurance |
Jonathan Adkisson |
San Francisco, Calif. |
| Farm Bureau Insurance – Tennessee |
Matthew M. Scoggins, Jr. |
Columbia, Tenn. |
| Farm Bureau Mutual |
James P. Brannen |
West Des Moines, Iowa |
| Farmers |
Jeffrey Dailey |
Woodland Hills, Calif. |
| GEICO |
Tony Nicely |
Chevy Chase, Md. |
| Grange Insurance |
John Ammendola |
Columbus, Ohio |
| The Hanover |
Frederick Eppinger |
Worcester, Mass. |
| The Hartford |
Christopher Swift |
Hartford, Conn. |
| Kentucky Farm Bureau |
Mark Haney |
Louisville, Ky. |
| Liberty Mutual |
David Long |
Boston, Mass. |
| MAPFRE Insurance |
Jaime Tamayo |
Webster, Mass. |
| Mercury |
Gabriel Tirador |
Los Angeles, Calif. |
| MetLife |
Steven Kandarian |
New York, N.Y. |
| National General |
Barry Karfunkel |
Winston-Salem, N.C. |
| Nationwide |
Stephen Rasmussen |
Columbus, Ohio |
| New York Central Mutual |
V. Daniel Robinson II |
Edmeston, N.Y. |
| North Carolina Farm Bureau |
Larry Wooten |
Raleigh, N.C. |
| PEMCO Insurance |
Stan McNaughton |
Seattle, Wash. |
| Plymouth Rock Assurance |
James M. Stone |
Boston, Mass. |
| Progressive |
Glenn Renwick |
Mayfield Village, Ohio |
| Safeco |
Matthew Nickerson |
Seattle, Wash. |
| Safety Insurance |
George M. Murphy |
Boston, Mass. |
| Shelter |
Rick Means |
Columbia, Mo. |
| State Farm |
Michael Tipsord |
Bloomington, Ill. |
| Texas Farm Bureau |
Russell Boening |
Waco, Texas |
| Travelers |
Jay Fishman |
New York, N.Y. |
| Wawanesa |
Jeff Goy |
San Diego, Calif. |
The 2016 U.S. Auto Insurance Study is based on responses from 44,681 auto insurance customers. The survey data was collected from January 29, 2016 to March 25, 2016.
For more information about the 2016 U.S. Auto Insurance Study, visit http://www.jdpower.com/resource/jd-power-us-auto-insurance-satisfaction-study
See the online press release at http://www.jdpower.com/press-releases/2016-us-auto-insurance-study
Media Relations Contacts
John Tews; J.D. Power; Troy, Mich.; 248-680-6218; [email protected]
About J.D. Power and Advertising/Promotional Rules www.jdpower.com/about-us/press-release-info
1 Note: Large insurers are those with more than $2 billion in direct written premium (DWP) and small insurers are those with less than $800 million in DWP.
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SOURCE J.D. Power
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