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J.D. Power and Associates Reports: Auto Insurance Customer Satisfaction Reaches an All-Time High, Driven by Satisfaction with Policy Offerings

June 25, 2012

WESTLAKE VILLAGE, Calif., June 25, 2012 /PRNewswire/ — Led primarily by increases in satisfaction with policy offerings and billing and payment, overall customer satisfaction with auto insurance companies has reached an all-time high, according to the J.D. Power and Associates 2012 U.S. Auto Insurance Study(SM) released today.

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The study measures customer satisfaction with auto insurance companies across five factors: interaction; price; policy offerings; billing and payment; and claims. Overall satisfaction with auto insurance companies is 804 (on a 1,000-point scale), up 14 points from 2011. Satisfaction levels in 2012 are the highest since the study was launched in 2000.

Satisfaction increases in all factors in 2012, with significant improvements in policy offerings (+30 points) and interaction (+19 points). Satisfaction with price is essentially unchanged from 2011.

“Although satisfaction with price remains consistent from 2011, auto insurance companies have made great strides in all other areas,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates. “Specifically in the area of policy offerings, a number of insurance companies place an emphasis on product differentiation in their advertising and packaging of discounts and offerings.”

The Most Satisfied Customers Are More Willing to Tolerate Rate Hikes, to a Point
The study finds that 20 percent of customers have experienced an insurer-initiated rate increase from 2011, with 63 percent of these customers experiencing an increase of $50 or more. Satisfaction among customers whose premiums increase by at least $50 is 735, compared with 797 among those experiencing an increase of less than $50.

“Among customers whose insurers meet or exceed all their service expectations, modest rate increases appear to be well tolerated, provided the rate adjustment amounts to less than $50. However, larger rate adjustments may trigger customers to consider shopping for a new insurer, especially those customers who are less engaged with their insurance company,” said Bowler. “One method auto insurers can use to mitigate dissatisfaction with increasing rates is to proactively communicate the rate change prior to the renewal notice, and engage in discussions with customers regarding their options.”

Discussing rate increases with customers and offering options may have a positive effect on satisfaction. Of auto insurance customers receiving a rate increase, 56 percent were not notified prior to the renewal notice, among whom satisfaction is 746. Conversely, satisfaction among customers who were notified prior to a rate increase and had a discussion with their insurer is 807.

Social Media Insurance Rate Chatter
Research conducted by J.D. Power’s Consumer Insight and Strategy Group[1] finds that a significant proportion of social media comments on the topic of personal auto insurance rate hikes indicate a strong desire to switch insurers, or to begin the shopping process. Additionally, many ask peers whether they have experienced similar results with a specific insurer or whether they would recommend another insurer altogether.

“Our research shows that most customers who shop for insurance ultimately do not switch. However, among those who are driven to shop because they are dissatisfied with the service they receive, three of four will keep shopping until they find a new insurer. With many insurers filing new property and auto rates across the country, a growing proportion of customers are starting to receive rate increase notifications, often a catalyst for shopping behavior,” Bowler said. “Proactively notifying customers and discussing options may help mitigate disappointment and shopping for insurance.”

The study measures satisfaction with auto insurance companies in seven regions. Study results by region are:

California Region: Wawanesa ranks highest among award-eligible insurers in the California region with a score of 823, followed by Automobile Club of Southern California (AAA) (807) and State Farm (806).

West Region: State Farm (837) ranks highest among award-eligible insurers in the West region, and is the only award-eligible insurer to perform above regional average.

Central Region: Texas Farm Bureau (857) ranks highest among award-eligible insurers in the Central region, followed by State Farm (832) and GEICO (830).

Southeast Region: Farm Bureau Insurance – Tennessee (828) ranks highest among award-eligible insurers in the Southeast region, followed by North Carolina Farm Bureau (823) and State Farm (821).

North Central Region: Auto-Owners Insurance and State Farm (in a tie at 828 each) rank highest among award-eligible insurers in the North Central region, followed by Erie Insurance (823).

Northeast Region: Amica Mutual (867) ranks highest among award-eligible insurers in the Northeast region, followed by New York Central Mutual (811) and GEICO (793).

Mid-Atlantic Region: Erie Insurance (834) ranks highest among award-eligible insurers in the Mid-Atlantic region, followed by State Farm (813).

Customer satisfaction varies from an average high of 814 in the Southeast region to a low of 784 in the Northeast region. While the Southeast region achieves the highest scores in interaction, billing and payment, policy offerings and claims, the West region performs particularly well in price.

To view the management discussion, which examines the shifting service channel behaviors in the auto insurance marketplace, as well as the impact they have on customer satisfaction, please click here.

The 2012 U.S. Auto Insurance Study is based on nearly 35,000 responses from auto insurance customers. The study was fielded between March and May 2012.

    Customer Satisfaction Index
     Ranking                                                                                                                        J.D. Power.com Power Circle Ratings
    California Region                                                                                                               For Consumers
    (Based on a 1,000-point scale)
    Wawanesa                                                                                                                    823                                    5
    Automobile Club of
     Southern California
     (AAA)                                                                                                                      807                                    4
    State Farm                                                                                                                  806                                    4
    GEICO                                                                                                                       801                                    4
    The Hartford                                                                                                                798                                    4
    Ameriprise                                                                                                                  792                                    3
    Safeco                                                                                                                      786                                    3
    California Average                                                                                                          785                                    3
    Mercury                                                                                                                     780                                    3
    NCNU (AAA)                                                                                                                  779                                    3
    Progressive                                                                                                                 773                                    3
    Liberty Mutual                                                                                                              770                                    3
    Allstate                                                                                                                    764                                    3
    Nationwide                                                                                                                  761                                    2
    21st Century                                                                                                                757                                    2
    Farmers                                                                                                                     754                                    2
    Infinity P&C                                                                                                                705                                    2
    *USAA                                                                                                                       912

    *USAA is an insurance provider open only to U.S. military personnel and their families and therefore is not included in the
     rankings.

    Customer Satisfaction Index Ranking             J.D. Power.com Power Circle
                                                  Ratings
    Central Region                                 For Consumers
    (Based on a 1,000-point scale)
    Texas Farm Bureau                       857                             5
    State Farm                              832                             4
    GEICO                                   830                             4
    American Family                         816                             3
    Shelter                                 814                             3
    Central Average                         811                             3
    Nationwide                              799                             3
    AAA Missouri/Texas                      795                             3
    Progressive                             794                             2
    Allstate                                792                             2
    Safeco                                  790                             2
    Farmers                                 787                             2
    Travelers                               780                             2
    Farm Bureau Mutual                      779                             2
    Liberty Mutual                          772                             2
    *USAA                                   896

    *USAA is an insurance provider open only to U.S. military personnel and
     their families and therefore is not included in the rankings.
    Included in the Central Region are: Arkansas, Iowa, Kansas, Minnesota,
     Missouri, Nebraska, North Dakota, Oklahoma, South Dakota and Texas
    Customer Satisfaction Index Ranking                                                                    J.D. Power.com Power Circle Ratings
    Mid-Atlantic Region                                                                                    For Consumers
    (Based on a 1,000-point scale)
    Erie Insurance                                                                                  834                                     5
    State Farm                                                                                      813                                     3
    Mid-Atlantic Average                                                                            807                                     3
    Nationwide                                                                                      800                                     3
    Travelers                                                                                       800                                     3
    Progressive                                                                                     799                                     3
    The Hartford                                                                                    795                                     3
    GEICO                                                                                           791                                     3
    Allstate                                                                                        785                                     2
    Liberty Mutual                                                                                  779                                     2
    21st Century                                                                                    763                                     2
    High Point Insurance                                                                            748                                     2
    *USAA                                                                                           913
    **NJM Insurance Co.                                                                             840

    *USAA is an insurance provider open only to U.S. military personnel and their families and therefore is not included in the rankings.
    **New Jersey Manufacturers Insurance Co. is an insurance provider open only to New Jersey Business & Industry Association members, State of New Jersey employees, NJM's previously
     insured drivers, and/or previous/current auto/homeowner policyholders and therefore is not included in the rankings.
    Included in the Mid-Atlantic Region are: Delaware, Maryland, New Jersey, Pennsylvania, Washington, D.C. and West Virginia

    Customer Satisfaction Index Ranking                                                                    J.D. Power.com Power Circle Ratings
    North Central Region                                                                                   For Consumers
    (Based on a 1,000-point scale)
    Auto-Owners Insurance                                                                           828                                     5
    State Farm                                                                                      828                                     5
    Erie Insurance                                                                                  823                                     5
    COUNTRY                                                                                         814                                     4
    Grange Insurance                                                                                807                                     3
    GEICO                                                                                           805                                     3
    North Central Average                                                                           804                                     3
    Liberty Mutual                                                                                  798                                     3
    Allstate                                                                                        796                                     3
    Progressive                                                                                     796                                     3
    American Family                                                                                 792                                     3
    The Hanover                                                                                     789                                     2
    Automobile Club Group (AAA)                                                                     783                                     2
    Michigan Farm Bureau                                                                            783                                     2
    Nationwide                                                                                      782                                     2
    The Hartford                                                                                    777                                     2
    Farmers                                                                                         764                                     2
    *USAA                                                                                           903

    *USAA is an insurance provider open only to U.S. military personnel and their families and therefore is not included in the rankings.
    Included in the North Central Region are: Illinois, Indiana, Michigan, Ohio and Wisconsin

    Customer Satisfaction Index Ranking                                                                     J.D. Power.com Power Circle Ratings
    Northeast Region                                                                                        For Consumers
    (Based on a 1,000-point scale)
    Amica Mutual                                                                                     867                                      5
    New York Central Mutual                                                                          811                                      4
    GEICO                                                                                            793                                      3
    Liberty Mutual                                                                                   792                                      3
    State Farm                                                                                       792                                      3
    Progressive                                                                                      786                                      3
    Northeast Average                                                                                784                                      3
    Travelers                                                                                        769                                      3
    Nationwide                                                                                       767                                      3
    MetLife                                                                                          762                                      3
    The Hartford                                                                                     760                                      3
    Allstate                                                                                         759                                      3
    Plymouth Rock Assurance                                                                          756                                      2
    Commerce                                                                                         753                                      2
    Safety Insurance                                                                                 753                                      2
    The Hanover                                                                                      738                                      2
    Arbella                                                                                          733                                      2
    *USAA                                                                                            890

    *USAA is an insurance provider open only to U.S. military personnel and their families and therefore is not included in the rankings.
    Included in the Northeast Region are: Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont
    Customer Satisfaction Index Ranking                                                                    J.D. Power.com Power Circle Ratings
    Southeast Region                                                                                       For Consumers
    (Based on a 1,000-point scale)
    Farm Bureau Insurance - Tennessee                                                               828                                     5
    North Carolina Farm Bureau                                                                      823                                     5
    State Farm                                                                                      821                                     5
    GEICO                                                                                           815                                     3
    Kentucky Farm Bureau                                                                            814                                     3
    Southeast Average                                                                               814                                     3
    Allstate                                                                                        806                                     3
    Auto-Owners Insurance                                                                           802                                     3
    Nationwide                                                                                      797                                     2
    Progressive                                                                                     796                                     2
    MetLife                                                                                         795                                     2
    Alfa Insurance                                                                                  794                                     2
    Liberty Mutual                                                                                  794                                     2
    The Hartford                                                                                    794                                     2
    Travelers                                                                                       790                                     2
    Farmers                                                                                         789                                     2
    GMAC                                                                                            785                                     2
    21st Century                                                                                    774                                     2
    Safeco                                                                                          763                                     2
    Direct General                                                                                  744                                     2
    *USAA                                                                                           930

    *USAA is an insurance provider open only to U.S. military personnel and their families and therefore is not included in the rankings.
    Included in the Southeast Region are: Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina and Tennessee

    Customer Satisfaction Index Ranking                                                                    J.D. Power.com Power Circle Ratings
    West Region                                                                                            For Consumers
    (Based on a 1,000-point scale)
    State Farm                                                                                      837                                     5
    West Average                                                                                    810                                     3
    GEICO                                                                                           808                                     3
    American Family                                                                                 804                                     3
    The Hartford                                                                                    803                                     3
    Progressive                                                                                     799                                     3
    Allstate                                                                                        797                                     3
    Farmers                                                                                         787                                     2
    Safeco                                                                                          786                                     2
    Liberty Mutual                                                                                  784                                     2
    Nationwide                                                                                      768                                     2
    *USAA                                                                                           897

    *USAA is an insurance provider open only to U.S. military personnel and their families and therefore is not included in the rankings.
    Included in the West Region are: Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming

Power Circle Ratings Legend:
5 – Among the best
4 – Better than most
3 – About average
2 – The rest

About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company providing performance improvement, social media and customer satisfaction insights and solutions. The company’s quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies
McGraw-Hill announced on September 12, 2011, its intention to separate into two public companies: McGraw-Hill Financial, a leading provider of content and analytics to global financial markets, and McGraw-Hill Education, a leading education company focused on digital learning and education services worldwide. McGraw-Hill Financial’s leading brands include Standard & Poor’s Ratings Services, S&P Capital IQ, S&P Indices, Platts energy information services and J.D. Power and Associates. With sales of $6.2 billion in 2011, the Corporation has approximately 23,000 employees across more than 280 offices in 40 countries. Additional information is available at http://www.mcgraw-hill.com/.

J.D. Power and Associates Media Relations Contacts:
Jeff Perlman; Brandware Public Relations; Woodland Hills, Calif.; (818) 598-1115; jperlman@brandwarepr.com

Syvetril Perryman; Westlake Village, Calif.; (805) 418-8103; media.relations@jdpa.com

No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power and Associates. www.jdpower.com/corporate

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[1] Research conducted by J.D. Power’s Consumer Insight and Strategy Group to track social media activity includes information gathered online from June 2011 through June 2012.

SOURCE J.D. Power and Associates


Source: PR Newswire