What do customers really think of their auto insurers?

Despite the auto insurance industry’s efforts to offer rebates during the pandemic, consumer satisfaction remained flat for 2021, a new study by J.D. Power has found.

According to the J.D. Power 2021 US Auto Insurance Study, overall consumer satisfaction remains flat following four straight years of improvement by the auto insurance industry.

“What we’re seeing in this year’s study is a case of insurers delivering with their actions but missing the mark on effective communication to their customers,” said Robert Lajdziak, senior consultant for insurance intelligence at J.D. Power.

The research noted that customer satisfaction still remained static despite the auto insurance industry returning over $18 billion in premium rebates in 2020.

“The refunds provided to customers during the pandemic were significant, representing nearly 7% of total industry premiums, but only half of customers were even aware of them,” Lajdziak explained. “Worse, when customers needed to communicate with their insurers, either via phone, website or chat, many came away feeling less satisfied with the result than in the past.”

Key findings of the report include:

• Out of a 1,000-point scale, overall customer satisfaction with auto insurers for 2021 is 835, unchanged from a year ago. J.D. Power stated that this is the first time since 2017 that auto insurance customer satisfaction has not improved year-on-year.
• Although price is the lowest-scoring factor in the study, it has seen the greatest improvement year-over-year, the study said. However, this improvement is overshadowed by significant declines in satisfaction with interaction.
  • Satisfaction with the assisted online channel (email and chat) declined 12 points from last year. Decreases were also seen in contact center (-5), website (-3), and local agent (-1).
• As of March 2021, just 52% of auto insurance customers were aware of their insurer’s COVID-19 premium relief efforts. Overall brand impressions are significantly higher among customers aware of relief efforts, which was reflected in their willingness to renew their policy.
• Thirty-four per cent (34%) of auto insurance customers say they are willing to try usage-based insurance; 16% of customers say they are already use the technology, twice as many as five years ago.
• Forty-five per cent (45%) of auto insurance customers say they would change their policy if they could receive savings of $200 or less. Among those who switched due to premium increases, 57% did so for increases of $200 or less.