The Ann Arbor, Mich.-based American Customer Satisfaction Index (ACSI) has released new data indicating that customer satisfaction with the finance and insurance sector is sliding.
The sector, which includes banks, credit unions, life insurance, health insurance and Internet investment services, dropped to its lowest score in a decade — 74.8 on ACSI's 100-point scale, a decrease of 0.4%.
"These are not happy times," said Claes Fornell, ACSI chairman and founder. "Insurance companies and credit unions are joining the troubling trend of deteriorating customer satisfaction that we've seen throughout most of the U.S. economy. Corporations facing increasing earnings and revenue pressure keep raising premiums and fees, which, combined with cost cutting to maintain profitability, is having a negative effect on service and on customer satisfaction. What might look good on the balance sheet in the short term is not helpful for long-term prosperity."
But property and casualty insurers remained unchanged at 79 out of 100 for customer satisfaction. However, customers who bundled their auto and homeowners coverage together are more satisfied on average (78) than those purchasing only auto insurance (76) or homeowners (75).
Smaller P&C insurers gained 5% to 83, followed by new entrant Farm Bureau at 80. The nation's biggest P&C insurer, State Farm, dropped 4% to 78, but GEICO remained in place at 77.
ACSI newcomers AAA and Nationwide led the rest of the P&C industry, tying at 75. Progressive fell 3% to 74, while Allstate dropped 5% to 73.
Together, American Family, Liberty Mutual and Travelers, making up the rest of the ACSI, came in at 73. Farmers showed the biggest decline, falling 8% to the bottom of the category at 71.
(Photo: Thinkstock)
Health insurers
Health insurance companies received millions of customers through the Affordable Care Act, but customer service ratings for the industry dropped by 1.4% to end at 69. Leading only ISPs and the pay TV industry, health insurers ended in the bottom five of industries included in the ACSI study.
Many new customers hold individual policies that provide a minimum of coverage with high deductibles. Customer satisfaction for individual policy holders fell by 4% to 71, but ahead of consumers with group coverage, acquiring a score of 68. Group policyholders who are offered a choice of plans scored 70 and are apparently more satisfied than those without choice (65).
"More Americans get group coverage through their employer, where they typically do not have a choice of provider," said David VanAmburg, ACSI Director. "As is generally the case, satisfaction is lower in industries where there is little or no choice."
Together, smaller health insurance companies dropped 3% to tie new entrants Humana and Kaiser Permanente at 71, followed by Blue Cross and Blue Shield, gaining 1% to 70. Anthem gained 5% to 69 and Aetna gained 5% to 68. UnitedHealth, last year's top-scoring large insurer, fell close to the bottom of the category, sliding 8% to 66. Cigna came in last with an ACSI score of 60.
Life insurance
The life insurance industry slid 3.8% to 77 for the second consecutive year.
New ACSI entrant Thrivent Financial took the lead scoring 82, followed by Primerica (81) and New York Life (+3% to 79).
Northwestern Mutual gained 3% to 78, matching the average score for smaller life insurance companies, while Prudential lost 3% to tie with life insurance newcomer Allstate at 77.
Mutual of Omaha debuted at 76, matching State Farm, measured in this category for the first time. The largest insurer in the country, MetLife, slipped 1% to tie with new ACSI entrant Lincoln Financial at 75.
Farmers, posting its first life insurance score, staggered behind at 71.
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Trudy Knockless
Trudy Knockless is a reporter on ALM Media's Business of Law desk. She has a background serving legal and insurance publications. Contact her at [email protected] or on LinkedIn at Trudy Knockless.
