J.D. Power Study: Satisfaction High for Auto Insurance Consumers Using the Internet

A small but growing group of customers are turning to the Internet rather than phone calls or office visits to communicate with their auto insurance provider, according to J.D. Power and Associates’ 2004 National Auto Insurance Study.

While only 7 percent of consumers are using the Internet to check on or update their auto insurance policies, their satisfaction is higher than those who use an automated phone system. In addition, their satisfaction is only slightly lower than those who talk directly with their insurance agent or representative.

“The Web represents a highly efficient communication channel,” said Jeremy Bowler, director of the insurance practice at J.D. Power and Associates. “It’s surprising that very few carriers appear to be successfully promoting its use for servicing customers.”

The study also finds that younger car insurance buyers are fueling the expansion of Internet insurance shopping. Forty-two percent of shoppers under 30 used the Internet to shop for auto insurance, compared to 29 percent of all shoppers.

“Insurance providers that are looking to attract new, young buyers, have to better integrate the Internet communications channel,” said Bowler.

New for 2004, the customer satisfaction index reveals that the customer experience is driven by five factors: interaction with the provider; billing; policy offerings and initiation; cost; and claims. However, while only a fraction of consumers filed a recent claim, those who have tend to be significantly more satisfied with their carriers than those who have not filed a claim.

“The claims experience is the moment of truth that drives a customer’s overall impression of their insurer, as well as their loyalty,” said Bowler.

Overall customer intent to renew their policy with their current carrier is at a four-year high and the likelihood to refer their provider to others has recovered to a level last seen in the 2001 study. Despite these high loyalty rates, nearly one-third of consumers, many spurred by a rate increase, report that they have shopped for a new provider in the past year. More than one-half of those who shopped went on to switch their provider.

Amica Mutual ranks highest in overall auto insurance customer satisfaction for the fifth consecutive year. Erie Insurance Group and GEICO tie in the rankings behind Amica Mutual, while Auto Club of Southern California and State Farm tie to round out the top five. USAA, an insurance provider open only to the U.S. military and their families and therefore not included in the rankings, performs particularly well in the study.

The 2004 National Auto Insurance Study is based on 13,944 responses from auto insurance policy holders.