Communication about rate increases key to policyholder satisfaction: JD Power

Customer satisfaction with auto insurers improved 26 points from 2009, despite the fact that a sizeable proportion of policyholders indicated experiencing premium increases, reports J.D. Power and Associates.
In its third annual 2010 Canadian Auto Insurance Customer Satisfaction Study, J.D. Power measures auto policyholder experiences with their primary insurer.
Customer satisfaction is measured across interaction, price/premium, policy offerings, billing and payment, and claims.
Overall satisfaction in 2010 averaged 727 on a 1,000-point scale, a noteable increase from the 701 reported in 2009.
At the same time, nearly four in 10 policyholders say their premiums increased in 2010.
Among the 61% of policyholders who were notified of a rate increase in advance in 2010, satisfaction averages 721. For those policyholders that did not receive any advance notification of a rate increase satisfaction averaged 628.
“Auto insurance providers may be able to take lessons learned about rate increase communication and apply them to their advantage when new options under the Ontario insurance reforms take effect on Sept. 1, 2010,” said Lubo Li, senior director and practice leader of Canadian financial services and insurance at JD Power.
“Although the new mandates will likely lower premium amounts for many policyholders, any changes in rates – whether positive or negative – should be communicated to customers well in advance to avoid any confusion or surprise.”
Li added that communicating with policyholders through phone calls or personalized emails is more satisfying than the traditional method of sending information by mail.