Canadian auto insurance customer satisfaction climbs despite premium increases: J.D. Power study
May 15, 2017 by Canadian Underwriter
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Customer satisfaction with auto insurance in Canada has increased for the second consecutive year despite nationwide premium increases, according to the newly released J.D. Power 2017 Canadian Auto Insurance Satisfaction Study.
The study, released on Monday, found that across all regions, price satisfaction and the median annual premium per vehicle increased. Reported premiums were up 17% in Quebec, 16% in the Atlantic region, 11% in Alberta and 1% in Ontario over the past two years, J.D. Power said in a press release.
“Notably, the lowest reported premium increases are in Ontario, indicating that these customers may finally be realizing Ontario’s Auto Insurance Rate Reduction Strategy to reduce premiums,” the release said. “While new-vehicle prices and costly options are driving premiums higher, the reduction strategy seems to be slowing premium increases in other provinces.”
Valerie Monet, senior director of the insurance practice at J.D. Power, added that “it does seem counterintuitive to see customer satisfaction increase as premiums rise, but customers are content to pay more when they believe they’re getting value for their money. While low prices can be effective at getting new customers in the door, those customers are ultimately willing to pay higher premiums for exceptional service,” she went on to say. “Key performance metrics, such as making sure customers understand their policies and providing follow-up calls from customer service interactions, translate into higher satisfaction – regardless of an above-average premium.”
Overall satisfaction with Canadian auto insurers averages 784 on a 1,000-point scale, up 26 points from 2016, excluding government insurers (the Insurance Corporation of British Columbia, Manitoba Public Insurance and Saskatchewan Government Insurance). Key drivers of the performance improvement are increased understanding of policy and what is covered and better overall customer service, J.D. Power reported.
Customer satisfaction in the Alberta region averages 762, up 19 points from 2016. In the Atlantic region, customer satisfaction averages 790, up 22 points from 2016. In Ontario, customer satisfaction in this region averages 783, up 30 points from 2016. And in Quebec, customer satisfaction is 813 on average, up 27 points from last year.
The study also found that price satisfaction was 63 index points higher among auto insurance customers who are paying premiums above the regional median and who completely understand their policies versus those who are paying less than the regional median and who do not understand their policies. And of the 32% of auto insurance customers who are aware their insurer offers telematics, just 8% are currently participating in safe driver discount programs that are monitored by in-vehicle computers, the release noted.
Now in its 10th year, the Canadian Auto Insurance Satisfaction Study measures customer satisfaction with primary auto insurers in Canada. Satisfaction is measured across five factors (in order of importance): non-claim interaction; price; policy offerings; billing and payment; and claims. Insurers are ranked in four regions (in alphabetical order): Alberta, Atlantic, Ontario and Quebec. The study is based on responses from nearly 11,000 auto insurance policyholders.
J.D. Power provides consumer insights, advisory services and data and analytics. Established in 1968, J.D. Power is headquartered in Costa Mesa, Calif., and has offices serving North and South America, Asia Pacific and Europe.
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I’ll have to contest this article, and many other ones like this.
There are 22 million people (statscan) who own and potentially operate a vehicle in Canada. A half ass, clearly biased, studies (if one can even call them that) of only 11 000 people is bull****. Making any kind of extrapolation or even interpretation of the hard numbers will lead you into the calm re-enforcing world of cognitive dissonance and reinforcement. Although this world is blind & in turn riddled negative with consequences.
I am new to the industry, although, after all the clients I have been dealing with, maybe, if we’re lucky, 10% are happy with the insurance industry (that is specific to auto & home). The rest of the sample are unaware of how insurance works, why the costs are so high (since I work in Ontario), or even the fundamental purpose or reasoning for insurance.
This is where the industry has failed. The home & auto insurance industry thinks they have a positive public perception but really they are resented by the general public. Even during the claims process, half of the clients I’ve dealt with have had a terrible experience, and to be reasonable, unfairly treated and resolved with each and every insurance company.
This self-indulgent shoulder padding will get the industry no-where, if they cannot objectively interpret how their position in the market and how the customer base sees them.
I know it is harsh, but honestly, you’d think that one of the biggest industries in Canada would fund better studies than the garbage referenced in this article.
Another example of how stupid these conclusions were;
“it does seem counterintuitive to see customer satisfaction increase as premiums rise, but customers are content to pay more when they believe they’re getting value for their money.”
Here is the problem, customers are not getting more value as the quality of coverage was reduced in the attempt to get lower premiums, WHICH DID NOT FOLLOW. I have yet to hear, from the lips of any client, that they are getting value for their money. I call shenanigans.
It is counter-intuitive, policies are objectively providing less coverage, nobody thinks they are getting value for their money. That is the reality. If the insurance industry does not see that, then their actions will be based on a false premise that people are happier with them. When, that is, for all practical reasons not true.