Are your insurance agency clients satisfied with their autoinsurance carrier?

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A new report found that a combination of record numbers of milesdriven, increased frequency and severity of collisions andextreme weather has crimped U.S. auto insurer profitability,resulting in rate increases for 26% of customers and a strain oncustomer satisfaction.

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According to the J.D. Power 2017 U.S. Auto InsuranceStudy released Monday, price satisfaction declined thisyear, even as other areas of the overall customer experience haveimproved.

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Related: Insurer customer satisfaction tied to online buyingexperience

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The study finds that the number of customers receiving an annualrate increase of more than $200 per vehicle has more thandoubled during the past four years, and that's having a profoundeffect on customer satisfaction.

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Insurers need to emphasize value of services

Price satisfaction scores among customers who receive a priceincrease of $200 or more are, on average, 188 pointslower than among those who experience price increases ofjust $25 or less. This shows that auto insurers need todo a better job of increasing the perception of value in theservices they provide.

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“Differentiating on service and demonstrating the value of thepolicy for premiums paid is going to be the key to improvingcustomer satisfaction,” said Greg Hoeg, vicepresident of U.S. insurance operations at J.D. Power.

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“As the amount of losses continues to increase for a myriad ofreasons, premiums must go up for carriers to remain profitable.However, carriers that are successful in getting beyond price byclearly communicating and demonstrating value through smooth claimsprocessing, exceptional customer service and a great selection ofofferings will emerge as leaders. Initiatives such as usage-basedinsurance programs and other proactive communications that showcustomers what they are getting for their money will help thatvalue perception.”

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Key findings

• Overall satisfaction improves while price satisfactiondeclines: Overall customer satisfaction with U.S.auto insurers improves in 2017 and is now at a historically highlevel (819 on a 1,000-point scale). Despite this improvement,satisfaction scores in the price factor have declined for a secondconsecutive year.
• Size of premium increase correlates withsatisfaction: Satisfaction scores average 726 amongcustomers who experience premium increases of $25 orless. Among those with an increase of $200 or more,satisfaction declines by 188 points to an average of 538.
• All hail, Texas: While pricesatisfaction at the national level declines just 1 point in 2017,there are wide variations in price satisfaction at the regionallevel. Texas experiences the sharpestdecline (-13 points) amid a rash of catastrophic losses — on top ofcollision losses—stemming primarily from hailstorms. Texas is followed by NewYork (-10 points), the Northwestregion (-9 points) and the Southwest region (-5points) among those regions experiencing the largest year-over-yeardeclines in price satisfaction.
• Telematics increase customer perception ofvalue: Usage-based insurance programs, which leveragetelematics technology to set insurance premiums based on how farand how safely a customer drives, may be the great equalizer whenit comes to customer perception of price. Price satisfaction scoresare between 54 and 72 points higher among customers who areusage-based insurance participants, even when those participantshave experienced premium increases.
• Communication clarifies value: Carrierscan minimize the negative impact of insurer-initiated priceincreases by providing clarity and transparency in policy coverage.Satisfaction among customers who received a price increase averages645 compared with 768 among customers without an increase; however,when carriers notify customers of a price increase in advance ofthe change, provide helpful information on customers' bills, andwhen customers say they completely understand their policy, pricesatisfaction averages 755.

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5 factors examined for customer satisfaction

The 2017 U.S. Auto Insurance Study examines customersatisfaction in five factors (in order of importance):

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1. Interaction.

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2. Policy offerings.

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3. Price.

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4. Billing process and policy information.

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5. Claims.

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The study is based on responses from 45,624 auto insurancecustomers, and was fielded in February-April 2017.

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Following are the auto insurance brand rankings by region (basedon a 1,000-point scale):

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California

1. Esurance (833)

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2. The Hartford (832)

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3. Wawanesa (829)

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4. Auto Club of Southern California Insurance Group(828)

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5. Ameriprise (823)

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6. State Farm (821)

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7. Geico (817)

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8. Safeco (817)

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9. Progressive (816)

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10. CSAA Insurance Group (806)

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11. 21st Century (802)

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12. Allstate (802)

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13. Nationwide (794)

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14. Mercury (793)

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15. Farmers (781)

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16. Liberty Mutual (777)

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Notes: Rankings are based onnumerical scores, and not necessarily on statistical significance.USAA is an insurance provider open only to U.S. military personneland their families, and therefore is not included in therankings.

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Related: 3 insurance technology trends for building customerrelationships in 2017

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Central region

Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, NorthDakota, Oklahoma and South Dakota

1. Auto-OwnersInsurance (865)

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2. Geico (836)

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3. American Family (835)

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4. Farm Bureau Mutual (835)

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5. The Hartford (831)

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6. Shelter (827)

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7. State Farm (827)

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8. Farmers (826)

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9. Progressive (826)

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10. Auto Club of Southern California Insurance Group(818)

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11. Allstate (813)

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12. Safeco (802)

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13. Nationwide (798)

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14. Travelers (798)

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15. Liberty Mutual (797)

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Related: Want happy customers? Then respond tothem

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Florida

1. Auto-Owners Insurance(843)

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2. 21st Century (820)

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3. Allstate (820)

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4. MetLife (820)

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5. The Hartford (818)

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6. Geico (817)

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7. Travelers (809)

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8. Safeco (807)

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9. State Farm (804)

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10. Esurance (800)

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11. Nationwide (789)

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12. Liberty Mutual (778)

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13. Mercury (752)

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Related: How driving habits are changing the auto insuranceindustry

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Mid-Atlantic region

Delaware, District of Columbia, Maryland, New Jersey,Pennsylvania, Virginia and West Virginia

1. The Hartford(830)

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2. Erie Insurance (829)

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3. Plymouth Rock Assurance (827)

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4. Travelers (823)

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5. CSAA Insurance Group (820)

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6. Allstate (818)

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7. Geico (817)

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8. Farmers (815)

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9. Nationwide (807)

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10. Liberty Mutual (801)

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11. State Farm (801)

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12. Progressive (795)

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Related: Insurers facing customer satisfactionchallenge

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New England region

Connecticut, Maine, Massachusetts, New Hampshire, Rhode Islandand Vermont

1. Amica Mutual (875)

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2. The Hartford (838)

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3. Geico (833)

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4. State Farm (815)

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5. Travelers (809)

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6. Liberty Mutual (808)

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7. Allstate (806)

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8. Nationwide (805)

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9. Arbella (803)

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10. Progressive (801)

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11. MetLife (797)

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12. Safeco (791)

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13. Plymouth Rock Assurance (790)

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14. MAPFRE Insurance (789)

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15. The Hanover (786)

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16. Safety Insurance (769)

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Related: What drives customer satisfaction?

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New York

1. The Hartford (850)

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2. New York Central Mutual (829)

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3. MetLife (823)

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4. State Farm (823)

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5. Nationwide (818)

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6. Travelers (808)

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7. Geico (805)

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8. Liberty Mutual (802)

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9. Progressive (797)

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10. Allstate (793)

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Related: Report: Autonomous cars to drive $81 billion in newinsurance premiums

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North Central region

Illinois, Indiana, Michigan, Ohio and Wisconsin

1. Auto-Owners Insurance (853)

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2. Cincinnati Insurance (846)

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3. Country Financial (845)

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4. The Hartford (836)

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5. Nationwide (827)

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6. Geico (825)

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7. American Family (822)

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8. MI Farm Bureau (822)

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9. State Farm (820)

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10. Erie Insurance (819)

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11. Grange Insurance (817)

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12. The Hanover (815)

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13. Allstate (814)

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14. Progressive (814)

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15. Farmers (812)

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16. Automobile Club Group (804)

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17. Liberty Mutual (803)

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18. MetLife (788)

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19. Safeco (780)

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20. Esurance (772)

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Related: Road rash: Why personal auto is a bit of awreck

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Northwest region

Idaho, Montana, Oregon, Washington and Wyoming

1. PEMCO Insurance (848)

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2. The Hartford (822)

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3. Farmers (810)

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4. Geico (809)

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5. State Farm (808)

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6. American Family (807)

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7. Liberty Mutual (807)

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8. Safeco (798)

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9. Nationwide (795)

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10. Allstate (789)

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11. Progressive (778)

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Related: 7 ways auto technology is impacting insurancecoverage

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Southeast region

Alabama, Georgia, Kentucky, Louisiana, Mississippi, NorthCarolina, South Carolina and Tennessee

1. Farm Bureau Insurance – Tennessee(864)

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2. Auto-Owners Insurance (842)

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3. NC Farm Bureau (837)

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4. Alfa Insurance (836)

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5. KY Farm Bureau (832)

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6. State Farm (830)

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7. Nationwide (829)

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8. Progressive (827)

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9. Travelers (826)

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10. Geico (824)

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11. National General (824)

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12. MetLife (821)

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13. Liberty Mutual (816)

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14. Allstate (806)

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15. Safeco (794)

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Related: Are we safe drivers? Apparentlynot…

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Southwest region

Arizona, Colorado, Nevada New Mexico and Utah

1. The Hartford (832)

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2. Allstate (816)

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3. State Farm (814)

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4. Geico (810)

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5. Liberty Mutual (807)

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6. American Family (805)

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7. Safeco (803)

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8. Progressive (802)

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9. Farmers (800)

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10. Travelers (796)

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11. CSAA Insurance Group (791)

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12. Nationwide (770)

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Related: It's the customer experience,stupid

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Texas

1. TX Farm Bureau (860)

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2. Auto Club of Southern California Insurance Group(836)

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3. Geico (830)

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4. Farmers (817)

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5. State Farm (806)

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6. Nationwide (803)

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7. Allstate (801)

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8. Progressive (795)

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9. Liberty Mutual (783)

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10 MetLife (781)

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Related: Top 10 personal auto carriers for 2016, as rankedby NAIC