The J.D. Power 2016 U.S. Auto Insurance Study has been released and overall customer satisfaction has declined.
The study measures customer satisfaction on a 1,000-point scale in five factors (in order of importance): Interaction, Policy Offerings, Price, Billing Process and Policy Information. Overall customer satisfaction declined this year, following an improvement in each of the past two years. The study also found that the perception of price increases is the main reason for the decline in customer satisfaction.
Last year, overall customer satisfaction came in at 818, but this year it dropped seven points to 811. Primary drivers of the decline are the 17 largest insurers, whose satisfaction levels also dropped by 7 points. This year’s study also marks the first time that smaller insurers had a higher satisfaction score than large insurers – 815 vs. 814, respectively. Overall satisfaction among small insurers increased by one point from 2015.
The level of satisfaction with call center representatives and local agents also dropped, six and seven points, respectively. Satisfaction with policy offerings is down 8 points to 809.
Not surprisingly, customers satisfied with their insurer are more likely to renew their policies, the study found. When overall satisfaction scored 900 and above, 75 percent said they “definitely will” renew their policy, compared to 12 percent of displeased customers, with overall scores of 549 and lower.
The J.D. Power 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.
“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.”