The J.D. Power 2021 US Auto Insurance Study has found overall customer satisfaction with automotive insurers is flat, following four consecutive years of improvement. This is despite the insurance industry returning more than US$18 billion to customers in 2020 due to the decline in distance driven during the COVID-19 pandemic.
“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 refunds provided to customers during the pandemic were significant, representing nearly seven per cent of total industry premiums, but only half of customers were even aware of them. 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.”
Forty-five per cent of insurance customers said they would switch if they could receive savings of US$200 or less. Of those who recently switched due to a premium increase, 57 per cent did so for increases of US$200 or less.
While price was the lowest-scoring factor in the study, it had the greatest improvement year over year. The improvement was overshadowed by significant declines in satisfaction with interaction. Satisfaction with the assisted online channel, comprised of chat and email functions, declined 12 points from a year ago, with decreases also seen in contact centre (-5), website (-3) and local agent (-1).
Overall customer satisfaction with automotive insurance providers was rated at 835 points on a 1000-point scale, unchanged from a year ago. This is the first time since 2017 that customer satisfaction has not improved year over year.
As of March 2021, just 52 per cent of insurance customers were aware of their insurer’s COVID-19 premium relief efforts. Overall brand impressions are significantly higher among customers who were aware of these relief efforts, which was also reflected in their intent to renew their policy.
Thirty-four per cent of customers said they are willing to try usage-based insurance, which uses telematics technology to track customer driving patterns and includes discounts based on safe driving and fewer miles driven. Sixteen per cent of customers said they are already using the technology. This is double the volume seen five years ago and the largest year-on-year increase to date.