Canadian Underwriter

Will Customer Satisfaction Drive Rebound for Insurers?


February 17, 2009   by Terri Goveia


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If shoppers will help spur an economic rebound, then property casualty insurers are well positioned to recover before other industries, according to a recent study of customer satisfaction.

Consumers are much more satisfied with the service and products they get from P&C insurers than that of banks and other service providers, reports The American Customer Satisfaction Index (ASCI). In the final quarter of 2008, the insurers earned an 81 ASCI score (on a 100-point scale), up 1.3 points from last year, and well ahead of major banks, which scored 75, and retail stores, which earned 75.2 overall. In the financial sector, only credit unions scored higher than P&C insurers, earning a score of 84, which the index researchers link to credit unions smaller sizes and individual attention. Health insurers scored below their P&C counterparts, at 73 points. The index, a collaboration between the University of Michigan’s Ross School of Business, the American Society for Quality and CFI, measures satisfaction with retail, finance and insurance and e-commerce every quarter.

Some companies scored at the high end of the satisfaction scale: State Farm and GEICO both earned an 80 ASCI score, while Progressive and Allstate followed at 79, compared to major companies in other sectors. Wal-Mart and Home Depot, for instance, scored only 70 points.

“A drop in premiums for property and casualty insurance in 2008 is driving the slight uptick in satisfaction with the industry,” the researchers note, pointing out that a similar overall uptick signaled better economic times during the 2001 recession. “The good news from ACSI is that the first condition has been met: customer satisfaction is looking up. But it remains to be seen to what extent the government stimulus plan will help translate stronger satisfaction into increased consumer demand,” Claes Fornell, professor of business administration at the University of Michigan, said in presenting the findings.

The researchers did not name AIG in their results, but point out, “it would be in the public interest to find out whether or not companies that receive taxpayer money can improve quality, service, and the satisfaction of their consumers.”

The overall ASCI index climbed to 75.7 for the quarter, up 0.9 points from the same period last year.

This story was originally published by Canadian Insurance Top Broker.


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