"The current situation is difficult for auto insurers, but it is not impossible to build customer satisfaction and retention in the current inflationary environment," said Robert Lajdziak, director of insurance intelligence at J.D. Power. "According to J.D. Power, there are two bright spots in the data for insurers." First, insurers that are transparent and notify customers of price increases in advance can mitigate the negative effects of a price increase. Second, usage-based insurance is rapidly expanding, with an all-time high number of customers adopting these programs, and overall customer satisfaction levels have significantly increased as a result of their experience using them."
The following are some of the study's key findings:
Customer satisfaction suffers as prices rise: Customer satisfaction with auto insurance providers is 834 (on a 1,000-point scale), down from 835 the previous year. Customer satisfaction with the price of their policies, on the other hand, is 769, a significant 5 point decrease from 2021.
Usage-based insurance is becoming increasingly popular: Participation in usage-based insurance programs, which use telematics technology to monitor driving habits and assign risk and pricing accordingly, has more than doubled since 2016, with 16 percent of auto insurance customers now enrolled. Customers who participate in these programs have 59 points higher price satisfaction on average than customers in general.
It is advantageous to anticipate bad news: Premium increases are bad for customer satisfaction, but insurers that are proactive about them and notify customers in advance can mitigate the negative effects they cause. In the last year, 59 percent of customers experiencing a price increase were notified in advance by their insurer, up from 44 percent in 2016, and overall satisfaction scores among those pre-notified customers are 37 points higher on average. For this type of notification, the phone is the most effective channel.
When customers use online self-service tools, agents benefit: Customers are more satisfied with the live channel when they interact with their insurer through both digital and live channels, such as agents or customer service representatives (CSRs). Customers can handle transactions quickly while spending more valuable time with an agent or CSR, which increases efficiency. A multi-channel strategy is a successful approach, and this is especially true when live channels are added for customers who prefer to shop online first.
The following are the top auto insurers and scores by region:
- California: Wawanesa (879) (for a third consecutive year)
- Central: Shelter (866) (for a second consecutive year)
- Florida: The Hartford (860)
- Mid-Atlantic: Erie Insurance (867)
- New England: Amica Mutual (862) (for a 10th consecutive year)
- New York: New York Central Mutual (834)
- North Central: Erie Insurance (876) (for a second consecutive year)
- Northwest: The Hartford (842)
- Southeast: Farm Bureau Insurance - Tennessee (876) (for an 11th consecutive year)
- Southwest: State Farm (848)
- Texas: Texas Farm Bureau (873) (for an 11th consecutive year)
In its 23rd year, the 2022 U.S. Auto Insurance Study examines customer satisfaction in five areas (in alphabetical order): billing process and policy information; claims; interaction; policy offerings; and price. The survey collected responses from 36,935 auto insurance customers between January and April 2022.