Customer service still overshadows price for car and home insurance policies in Canada, according to a new study by JD Power and Associates.
The '2008 Canadian Home and Auto Insurance Customer Satisfaction Study', which measures auto and home insurance policyholder experiences with their primary insurers, reveals that customer service accounts for 38% of satisfaction among home insurance policyholders, while price/premium accounts for only 17%.
Even among auto insurance policyholders, where premiums are higher and price sensitivity is greater, customer service remains the most important driver - making up 28% of customer satisfaction, compared with 25% accounted for by price/premium. The study measured customer satisfaction for both auto and home insurance providers across five factors: customer service; price/premium; policy offerings; billing/payment; and claims.
According to Lubo Li, senior director of Canadian financial services and insurance at JD Power and Associates, "Insurance is a service industry, and policyholders expect their insurers to deliver a superior experience-particularly through proactive communication, including regular reviews of auto and home insurance needs and providing appropriate recommendations. Insurers who meet and exceed the expectations of their policyholders will be rewarded with higher customer satisfaction, loyalty and advocacy."
State Farm ranks highest in customer satisfaction among private full-coverage automotive insurance providers (based on consumer survey responses from fully private auto insurance markets with no mandated government insurers, and excluding the survey data from British Columbia, Saskatchewan, Manitoba and Quebec) with a score of 757 on a 1,000 point scale, performing particularly well in customer service and billing/payment. Belairdirect and Johnson Insurance follow in the rankings.
The study reveals that among policyholders who have filed a claim with their primary auto insurer in the past three years, the importance of claim handling increases considerably to account for 41% of overall satisfaction.
Auto insurance customers who say they are "delighted" (providing ratings of 10 on a 10-point scale) with their insurer report making an average of six positive recommendations during the past 12 months, while "dissatisfied" policyholders (providing ratings of 4 or less) report making 12 negative comments about their insurer during the same period, on average.
According to Lee, "Word of mouth is still the most-utilised source of information for customers who are deciding which automotive insurer to use."
Among home insurance providers (based on consumer surveys from all provinces in Canada), BCAA ranks highest with a score of 812, and performs particularly well in four of the five factors driving satisfaction: customer service; price/premium; policy offerings; and billing/payment. SSQ General and Belairdirect follow BCAA in the rankings.