Homeowners insurers in recent years have done a better job portraying coverage as a value sale, evidenced by increases in consumer satisfaction with policy offerings, according to an insurance expert with J.D. Power & Associates.
Jeremy Bowler, senior director of the global insurance practice at J.D. Power, says customer satisfaction in the company's most recent survey was at787 on a one-thousand-point scale, up by two points compared to last year's survey. Bowler notes that satisfaction had been trending upward leading up to and into 2009, before dropping from 773 to 750 in 2010 due to the recession. The industry has seen steady improvement since then, Bowler notes.
In this year's survey, Bowler says satisfaction with pricing declined, while satisfaction with claims and policy services was a push. The satisfaction gains, he said, were in billing and payment, and policy offerings.
Bowler notes that insurance ads tend to focus mostly on price, but he pointed to a resurgence of the idea of insurance as a “value sale,” which has contributed to the higher satisfaction in offerings. Bowler mentioned ads focusing vanishing deductibles and Allstate ads featuring Mayhem—a fictional character that highlights what risks insurance protects against—as examples.
In effect, satisfaction is not due to any significant changes in the policies themselves, Bowler says, but rather how insurers have highlighted coverages.
Agents, Think Rental Insurance!
J.D. Power also used this year's survey to highlight an opportunity for agents to build long-term relationships with customers by concentrating more on renter's insurance. Bowler notes that agents tend to focus more on auto or homeowners policies, as those coverages offer more “bang for the buck” as far higher premiums and, therefore, higher commissions.
But J.D. Power notes that agents “are missing a golden opportunity to build long-term relationships with renter customers as their insurance needs grow due to life or circumstance changes—such as having a family or purchasing a home or additional car.”
Additionally, there are plenty of opportunities to inform clients about his coverage, as J.D. Power states that 46 percent of renters are uninsured. Bowler points out that renter's insurance is not compulsory as homeowners and auto are in most states, and that contributes to the much lower take-up rate.
But Bowler notes that more rental companies are moving toward requiring renter's insurance on properties and own, and he adds that, since the housing crisis, many people accustomed to having insurance on their possessions have switched from being homeowners to renting.
Satisfaction Leaders
As for this year's satisfaction survey, Amica Mutual topped all insurers with a satisfaction score of 842. State Farm (813) finished second, and Auto-Owners Insurance (812), Erie Insurance (811) and Automobile Club of Southern California (808) rounded out the top five. Encompass, American Family, Progressive, COUNTRY, Allstate and Geico all finished above the 787 industry average.
The Hartford finished right at 787.
Travelers had the lowest satisfaction rate among the listed insurers at 756. NCNU Insurance Exchange, Nationwide, MetLife, Safeco, Automobile Club Group, Chubb, The Hanover and Liberty Mutual all finished below the industry average.
USAA scored 894, but was excluded from the rankings since it is only open to military personnel and their families.
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