Canadian Underwriter

Auto insurer satisfaction declines in some provinces: J.D. Power study


May 6, 2014  


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One in five auto insurance customers in Canada have shopped for a new insurer in the past 12 months and 9 percent have switched, according to the J.D. Power 2014 Canadian Auto Insurance Satisfaction Study.

The study found that each insurance company captures less than an average of 1 percent of customers shopping for a new insurance policy. Brand awareness limits most carriers’ ability to attract shoppers, as they typically limit their search to an average of only 1.5 quotes.

Read: BC brokers rank the performance of their insurer partners

“Even the largest national insurance companies have limited awareness,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power, in a press release. “Some of the big carriers may be well-known in one city or province, but have little or no awareness outside of that market. To grow their business, they need to build brand awareness, which traditionally requires significant advertising investment.”

Once an insurer wins a new customer, every touch point they have with that customer is crucial and can be the difference between a loyal customer and a defector. Study findings show that the three most critical touch points are the annual or semi-annual renewal notice; when a customer contacts their insurer for non-claims-related reasons (62 percent of customers have contacted their insurer either directly or through an agent in the past 12 months regarding a non-claim-related issue); and when a customer files a claim (12 percent of customers filed an auto claim in the past year).

Read: Which insurer ranks highest in auto claims experience?

Other Key Findings: 

Price: Historically a key differentiator among insurance companies, price is now having less impact on overall customer satisfaction. Price satisfaction is highest in Quebec, primarily because the government insures against injuries to people, thus bodily injury coverage is not required for vehicle owners, keeping premiums lower than in other provinces. In Ontario, auto insurance is regulated by the Financial Services Commission of Ontario, which in 2013 implemented its Auto Insurance Cost and Rate Reduction Strategy, contributing to an increase in price satisfaction of 6 points (on a 1,000-point scale).

Growth: The average growth rate among all insurers included in the study was 4 percent. The largest growth rate was 24 percent, while the largest attrition rate was 11 percent.

Customer Satisfaction: Across the three provinces in the study, overall customer satisfaction dropped to 758 in 2014 from 766 in 2013. Declines in satisfaction with claims (-29 points), interaction (-13) and billing and payment (-12) account for the majority of the year-over-year drop. Price is the only factor in which satisfaction improved.

The study, now in its seventh year, measures insurance customer experiences with their primary auto insurer in Canada. Customer satisfaction is measured across five factors (in order of importance): interaction; price; policy offerings; billing and payment; and claims. Insurers are ranked in three provinces: Ontario, Alberta and Quebec. 

Compare with last year’s results here 

Regional Rankings

Alberta: Customer satisfaction averaged 744, down 3 points from 2013. Co-operators ranked highest in customer satisfaction in Alberta with a score of 782. Alberta Motor Association ranked second (770), followed by Johnson Insurance (754).

Ontario: Customer satisfaction averaged 749, down 7 points from 2013. Belairdirect (784) ranked highest in Ontario, followed by CAA Insurance Company (778) and State Farm (773).

Quebec: Customer satisfaction improved 2 points in 2014 to 804. In Quebec, The Personal ranked highest for a second consecutive year, with a score of 837. La Capitale ranked second (821) and Desjardins General Insurance (805) third. 

Study Rankings 

Overall Customer Satisfaction Index Scores                           

(Based on a 1,000-point scale)        

Alberta 

Co-operators 782
Alberta Motor Association 770
Johnson Insurance 754
Aviva Insurance 745
Alberta Average 744
Intact Insurance 740
Wawanesa 734
TD Insurance 734

 

Ontario

Belairdirect 784
CAA Insurance Company 778
State Farm 773
Grey Power 767
Co-operators 763
Allstate 753
Dominion of Canada 752
Johnson Insurance 750
Ontario Average 749
The Personal 749
Desjardins General Insurance 748
Intact Insurance 747
Gore Mutual 747
RBC Insurance 746
Economical Insurance 740
TD Insurance 736
Aviva Insurance 729
Wawanesa 725
RSA 719

 

Quebec

The Personal 837
La Capitale 821
Desjardins General Insurance 805
Quebec Average 804
Intact Insurance 801
Industrial Alliance 800
Belairdirect 798
Aviva Insurance 794
L’Union Canadienne 793
National Bank Insurance 778
TD Insurance 777

 

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This story was originally published by Canadian Insurance Top Broker.