16th June 2019
The J.D. Power 2019 US Auto Insurance Study has been launched.
The last decade of constant direct-to-consumer advertising and heavy investment into digital self-service technologies have driven roughly one-fourth of auto insurance customers to adopt direct distribution models that bypass agents in favour of do-it-yourself tools. That transition has helped overall customer satisfaction with auto insurance providers reach its highest level ever.
Below are some of the key findings of the 2019 study:
-Record-high satisfaction driven in part by direct service models: Overall customer satisfaction with US auto insurers improved in 2019 and is now at a record-high level of 831 (on a 1,000-point scale). Within the total universe of auto insurance customers, the 23% of customers who use direct distribution models have the highest overall satisfaction.
-The more, the merrier: Satisfaction levels are significantly higher when auto insurance customers bundle their auto policy with additional policies, such as home and life insurance(837) than when they do not bundle(812). While, overall satisfaction scores, advocacy rates and likelihood-to-renew levels are all higher when customers bundle one or more insurance products with their auto policies, insurers have done a poor job at making the customer experience easier for bundlers.
-Average premium amount flat this year, which helps customer satisfaction: Customers say auto insurance premiums have levelled in 2019, following significant increases in the previous two years. The tipping point is where customer satisfaction and retention start to become negatively affected by a price increase, is $100. The threshold for the likelihood to shop around at other insurance companies is lower, just $50.
-Attrition risk likely to rise: Price sensitivity peaked in 2010, shortly after the S&P 500 reached its lowest point following the Great Recession, when 87% of auto insurance said they would switch insurers for any amount of financial savings. In 2019, that number is 72%. With a possible market correction in sight, insurers will need to understand how to execute on the key performance indicators identified in the study that mitigate price sensitivity.
-A do-it-yourself attitude: Customers’ reliance on agents—feeling they are extremely important—has declined 33% over the past 20 years. Nearly one-fifth(17%) of customers with an agent say they have never met their agent in-person or over the phone.
J.D.Power Trends(37 articles)