Customer satisfaction with property and casualty (P&C) insurers has dropped to its lowest point in several years, according to December 2012 results from the American Customer Satisfaction Index (ACSI). The index for P&C insurers overall declined 6% from a score of 83 in 2011 to 78 in 2012, with the score held by the aggregate of smaller insurers falling 7% from 83 to 77, as AAA, Nationwide, and Travelers in particular saw declining rates of satisfaction. Progressive bucked the trend, with a 3% increase to a score of 81, putting it into a tie with State Farm (down 1 point) as the category leader.
GEICO dropped a couple of points to a score of 79, tied with Farmers (flat) and Allstate (up 1 point). Each of the large P&C insurers scored better than the aggregate of smaller insurers, which in 2011 had seen the highest rates of satisfaction.
While the ACSI data shows a dip in satisfaction for P&C insurers, they remain well ahead of other industries including cell phones, subscription TV services, and newspapers. They also rate better than health insurers (72), though were overtaken this year by life insurers (81).
All told, the P&C industry is not suffering from a significant customer satisfaction problem, according to a new MarketingCharts report [download page] on personal lines insurance marketing. Analysis contained in the report of an earlier study from Deloitte, for example, shows 8 in 10 auto insurance customers being either very satisfied (37%) or satisfied (43%) with their insurance pricing, and an even higher proportion being very satisfied (47%) or satisfied (41%) with their insurer’s service. Homeowner policyholders displayed similar sentiment, with 78% satisfied or very satisfied with price, and 82% showing similar levels of satisfaction with service.
Interestingly, the MarketingCharts report also demonstrates that dissatisfaction does not always translate to disloyalty, citing survey results from Insure.com showing that 65% of auto insurance customers “very unsatisfied” with their pricing still planned to renew, as did 67% of those “very unsatisfied” with their claims handling. Still, satisfaction plays a role, as renewal expectations were much higher among those very satisfied with their insurers’ pricing and claims. Indeed, according to a J.D. Power & Associates study, 45% of respondents doing business with high-satisfaction insurers said they would not switch for any price, more than double the proportion (21%) of those insured with low-satisfaction insurers who said the same.
In general, then, satisfaction rates do make a difference, even if customer loyalty (or inertia) is high. And while P&C insurers may not be behind in their customer satisfaction scores (despite this year’s dip), that doesn’t mean they can rest on their laurels. That’s because younger consumers, who are more likely to shop around and switch carriers, are also the least likely to be satisfied with their carriers.
- Blue Cross and Blue Shield led all health insurers with a score of 73, up from 68 in 2011, according to the ACSI results.
- Credit unions (82) continued to have higher satisfaction rates than banks (77), as they did in 2011. Still, the gap narrowed significantly this year, by virtue of a 5-point drop for credit unions (87 to 82) and a 2 point rise for banks (75 to 77).
About the MarketingCharts Report:
The 85-page report on personal lines insurance marketing from MarketingCharts contains 43 charts and graphs, and is an exhaustive analysis of primary and secondary research, including a host of new statistics provided exclusively by several research sources. The report delves into topics and benchmarks including:
- Customer loyalty and satisfaction, and drivers for each;
- Online and traditional media spending and efficacy;
- The importance of the online presence and new media touchpoints;
- Lead generation techniques, and lead scoring; and
- The role of the independent agent in a market upended by the internet.
The full report can be purchased here.