State Farm Ranks Highest in Customer Satisfaction among Private Full-Coverage Auto Insurance Providers; BCAA Ranks Highest in Customer Satisfaction among Home Insurance Providers
TORONTO: 16 October 2008 – 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 StudySM released today.
The inaugural study measures auto and home insurance policyholder experiences with their primary insurers. Customer satisfaction is measured for both auto and home insurance providers across five factors: customer service; price/premium; policy offerings; billing/payment; and claims.
The study finds that customer service accounts for 38 percent of satisfaction among home insurance policyholders, while price/premium accounts for only 17 percent. Even among auto insurance policyholders, where premiums are higher and price sensitivity is greater, customer service remains the most important driver�making up 28 percent of customer satisfaction, compared with 25 percent 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. “Insurance is a service industry, and policyholders expect their insurers to deliver a superior experience�particularly through proactive communication, including regular reviews of auto and home insurance needs and providing appropriate recommendations. Insurers who meet and exceed the expectations of their policyholders will be rewarded with higher customer satisfaction, loyalty and advocacy.”
Auto Insurance Rankings and Findings
State Farm ranks highest in customer satisfaction among private full-coverage automotive insurance providers1 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 percent of overall satisfaction.
“For the 30 percent of customers who have had to file an auto insurance claim, this experience becomes the �moment of truth� for their insurer,” said Li. “The manner in which a customer�s claim is handled shapes their entire insurance experience and determines their perception of their insurer.”
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.
“Word of mouth is still the most-utilized source of information for customers who are deciding which automotive insurer to use,” said Li. “The difference between positive recommendations and negative comments can have a substantial impact on an insurance provider�s marketing and acquisition efforts, as well as its long-term brand building.”
Home Insurance Rankings
Among home insurance providers, 2 BCAA ranks highest with a score of 812, and performs particularly well in four of the five factors driving satisfaction: customer service; price/premium; policy offerings; and billing/payment. SSQ General (787) and Belairdirect (777) follow BCAA in the rankings.
The 2008 Canadian Home and Auto Insurance Customer Satisfaction Study is based on responses from 8,965 auto insurance policyholders and 5,687 home insurance policyholders. The study was fielded through a nationally representative online survey in August 2008.
About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services firm operating in key business sectors including market research, forecasting, performance improvement, training and customer satisfaction. The firm�s quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on boat ratings, 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. Visit http://www.jdpower.com/.
About The McGraw-Hill Companies
Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor’s, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2007 were $6.8 billion. Additional information is available at http://www.mcgraw-hill.com/.