NU Online News Service, April 2, 2:31 p.m. EDT
Despite the record number of weather-related catastrophe claims last year, customer satisfaction with homeowners claims experiences improved over the previous year, according to a J.D. Power and Associates survey.
The Westlake Village, Calif.-based marketing-information-services firm says overall customer satisfaction in the survey increased by 10 points to 833 on a scale of 1000.
J.D. Power called the increase “noteworthy” because 2011 stood-out with 99 weather-related disasters throughout the United States. Fourteen of those events totaled more than $1 billion in damages, the firm notes, according to figures released by the Insurance Information Institute.
“A period of tremendous volatility in the industry, caused by a large number of devastating storms, led us to anticipate that satisfaction would decline, but that clearly was not the case,” says Jeremy “Bowler, senior director of the insurance practice at J.D. Power. “The industry as a whole did well in not only handling the day-to-day claims, but also the large volume of claims associated with those major events.”
However, while the overall results increased, the results were mixed when examined by region.
J.D. Power says comparing the 2012 study to 2011 study in the South Atlantic and Northeast regions, satisfaction increased by 36 points and 18 points respectively. This increase was despite the increase in high-wind claims due to hurricanes in 2011.
On the other hand, in the East North Central Region, where tornado damage rose, satisfaction declined by 14 points on a year-to-year comparison.
Bowler suggests that one reason for the increase in satisfaction is because insurers are able to plan their response and position resources as a hurricane approaches. On the other hand, a tornado gives little warning and insurers are left to react on short notice.
J.D. Power underscores the importance of customer-claims satisfaction for carriers noting that customers that are satisfied are more likely to renew with the same carrier than those who do not.
The survey found 84 percent of those who are “highly satisfied” say they “definitely will” recommend their insurer and 81 percent say they “definitely will” renew with their insurer.
That compares with only 12 percent that say they “definitely will” renew when they gave a low satisfaction rating, a score of 550 or lower. Eighteen percent of those surveyed say they had already switched carrier.
The survey was based on 4,200 responses from homeowners-insurance customers that filed a property claim between May 2010 and January 2012.
Among the 19 insurers highlighted by J.D. Power, Amica received the top honor with a score of 894, followed by Auto-Owners Insurance (score of 873) and Nationwide (score of 872).
The number one homeowners multi-peril insurer based on market rankings from SNL Financial, State Farm, scored an 846, ranking it 8th in the satisfaction survey.
Number two in market share, Allstate, scored an 829 and placed 14 in satisfaction. Number three in market share, Farmers was 18th in satisfaction with a score of 818.
Nationwide is ranked 7th in terms of market share and Auto-Owners is ranked 12th.