Customer satisfaction drops for U.S. auto insurers: J.D. Power

Customer satisfaction with U.S. auto insurance carriers has dropped in five categories over the past year, suggests a study released Monday by J.D. Power and Associates.

The J.D. Power 2013 U.S. Auto Insurance Study measures customer satisfaction in interaction, price, policy offerings, billing and payment and claims.

“Scores across all five factors have decreased year over year, with price and policy offerings both declining by 13 points,” J.D. Power stated in a press release. “These two factors are the primary forces contributing to lower overall satisfaction.”

On a 1,000-point scale, price satisfaction measured 716, which is lowest of the five factors studied, notes Westlake Village, Calif.-based J.D. Power.

“In today’s low-interest market, many insurers are filing for new rate structures in order to rectify underwriting losses,” stated Jeremy Bowler, senior director of J.D. Power’s global insurance practice, in a press release.

“To prepare for the likely downturn in customer sentiment and risk of increased attrition following a premium increase, insurers need to do a better job of proactively reaching out to their customers and explaining the reasons behind the rate increases.”

The scores are from the firm’s Power Circle Ratings, which are based on opinions of consumers who have used the product being rated. Although it ranked individual carriers, the J.D. Power stated in a footnote that those rankings are “based on numerical scores, and not necessarily on statistical significance.”

Across the U.S. carriers, overall satisfaction was 794 out of 1,000 in 2013, 10 points lower than in 2012.

“Despite this drop, satisfaction in 2013 is the second-highest level since the study launched in 2000,” J.D. Power stated.

This year, there was a “sharp rise” in the number of consumers whose premium increased, according to the study.

“When customers receive pre-notification, and discuss their options prior to renewal, satisfaction averages 698, 67 points higher than among customers whose did not get to discuss a rate increase prior to renewal.”