What determines the customer satisfaction rating?
There are many customer satisfaction surveys and rating schemes available. One of the most well-known and reputable is J.D. Power. For more than 50 years J.D. Power has been providing consumer research, data, and analytics. J.D. Power is best known for its automotive research. You have probably seen countless car commercials boasting of a given car's J.D. Power rankings. Subaru was the first car company to mention its J.D. Power ranking in a commercial, back during the 1984 Super Bowl.
Since then, many companies around the world have followed suit, advertising their J.D. Power rankings and using the data to help develop their customer relations strategies. J.D. Power creates benchmark studies based on consumer insights. By surveying consumers, J.D. Power analyzes and then ranks companies in dozens of categories over nine industries every year. It then gives awards to the best-performing companies.
J.D. Power has been examining customer satisfaction for the U.S. auto insurance industry for 23 years. They rank auto insurers through the following five factors (in alphabetical order):
- Billing process and policy information
- Claims
- Interaction
- Policy offerings
- Price
The 2022 U.S. Auto Insurance Study is based on responses from 36,935 auto insurance customers and was fielded from January through April 2022.
Why is knowing customer satisfaction important?
The J.D. Power Auto Insurance Satisfaction Study provides how customers view their auto insurer. The customers' perception is based on their auto insurer's ability to meet their expectations at both the national and regional levels. The study examined the relationship between customer satisfaction and how well the auto insurer performed financially, as well as retention levels. The study also identified the best practices that auto insurance companies use and how they are directly linked to customer satisfaction.
In evaluating the overall customer satisfaction with their auto insurance companies, J.D. Power asked these questions:
- What are the key drivers of satisfaction for auto insurance customers?
- What creates the most satisfying experience for the customer?
- What are the key trends insurers must act on to better satisfy their customers?
- What impact are digital channels and changing demographics having on insurers and their current processes with their customers?
- Which insurers are providing the best experiences for their customers and what are they doing to achieve that?
Overall J.D. Power found that drivers across the board were dissatisfied with their auto insurance company due to the rise in premium costs. This rise was due to the skyrocketing costs of used cars, a record number of serious collisions, and surging repair costs. The study found that customer satisfaction with the price of auto insurance declined sharply. Many auto insurers were able to improve customer engagement levels, however. This kept overall customer satisfaction at a level similar to last year's study.
What are the top rated auto insurance companies for customer satisfaction?
For the 2022 U.S. Auto Insurance Study, here are the companies with the highest customer satisfaction with auto insurance in 11 geographic regions. The score is out of 1000. The top companies are typically regional insurance companies.
- California:
- Wawanesa (879) (for a third consecutive year)
- Region average: 820
- Central:
- Shelter (866) (for a second consecutive year)
- Region average: 835
- Florida:
- The Hartford (860)
- Region average: 832
- Mid-Atlantic:
- Erie Insurance (867)
- Region average: 839
- New England:
- Amica Mutual (862) (for a 10th consecutive year)
- Region average: 823
- New York:
- New York Central Mutual (834)
- Region average: 822
- North Central:
- Erie Insurance (876) (for a second consecutive year)
- Region average: 838
- Northwest:
- The Hartford (842)
- Region average: 829
- Southeast:
- Farm Bureau Insurance: Tennessee (876) (for an 11th consecutive year)
- Region average: 849
- Southwest:
- State Farm (848)
- Region average: 827
- Texas:
- Texas Farm Bureau (873) (for an 11th consecutive year)
- Region average: 844
USAA scored 879 out of 1000, which would make it number one in all 10 regions and tied for first in one. However USAA is not rank eligible since it does not meet the study award criteria.
Those surveyed said that any price increase in premiums could be offset if insurers were transparent and notified them of price increases in advance. The study also found that usage-based insurance, which gives a discount based on your driving behavior, is growing rapidly. The number of drivers adopting these programs are at an all-time high. Overall customer satisfaction has risen significantly among drivers using them.
What companies receive the poorest customer satisfaction ratings?
Here are the auto insurance companies that received the lowest customer service ratings by J.D. Power.
- California:
- Kemper (748)
- Region average: 820
- Central:
- Nationwide (800)
- Region average: 835
- Florida:
- Progressive (810)
- Region average: 832
- Mid-Atlantic:
- Plymouth Rock Insurance (789)
- Region average: 839
- New England:
- Allstate (787)
- Region average: 823
- New York:
- Liberty Mutual (798)
- Region average: 822
- North Central:
- Liberty Mutual (807)
- Region average: 838
- Northwest:
- Farmers (802)
- Region average: 829
- Southeast:
- Farmers (828)
- Region average: 849
- Southwest:
- CSAA Insurance Group (798)
- Region average: 827
- Texas:
- Farmers (819)
- Region average: 844
Based on J.D. Power's study, national auto insurers tend to have the lowest customer satisfaction scores. Farmers has the lowest in three regions, Liberty Mutual in two, and Allstate, Nationwide, and Progressive each in one.
The study found that the price of a policy has a significant impact on customer satisfaction. However, if auto insurers are proactive and notify customers in advance, it can help with the negative effect cost increases have. Calling was found to be the most effective way to let customers know of any coming price increases. In addition to offering digital tools, insurers that use agents and customer representatives can also increase their customer satisfaction.
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