P&C Edges Out Life & Health In Customer Satisfaction Survey

NU Online News Service, Feb. 16, 1:32 p.m. EST

The property and casualty insurance industry continued to edge out life and health insurers in a customer satisfaction survey, but overall satisfaction with p&c dropped slightly, according to a national survey.

The American Customer Satisfaction Index, a quarterly index produced by the Ann Arbor, Mich.-based market research firm, found that despite p&c insurers edging out life and health insurers in the satisfaction index, p&c insurers took a 1 point hit, dropping to 80 in 2009.

Life insurers found themselves close behind p&c with an ACSI score of 79, an improvement of 1 point. Health insurers lagged behind with a score of 75, but gained 2 points from the previous year's score.

Overall, among p&c insurers, State Farm had the highest ranking at 82, up 2 points from 2008.

State Farm was followed by GEICO, up 1 to 81; then Progressive, up 1 to 80; Allstate scored a 79, unchanged from the previous year, and Farmers rounded out the major insurers with a score of 78, an improvement of 1 from the previous year.

In the category of all other insurers, p&c took a 2 point satisfaction hit, dropping down to 79.

The decline in overall satisfaction with p&c insures was due to the challenge by smaller insurers "to provide the same rates as their larger competitors, focusing instead on service," said Claes Fornell, professor of The Donald C. Cook of Business Administration, Stephen M. Ross School of Business, University of Michigan (where the index was founded) and chairman of the ACSI, in a commentary on the results.

On the life side, Northwestern Mutual Life Insurance improved 3 points to 81; New York Life Insurance jumped 3 points to 80; MetLife dropped one point to 77, and Prudential Financial dropped two points to 77. All other insurers rose 1 point to 80.

Mr. Fornell credited the increases for both p&c and life companies to improvements in their customer relationships.

Health insurers bounded up 2 points, the second straight year of improvement, to a score of 75. Mr. Fornell noted that some health insurers, notably UnitedHealth and Aetna, tried to rein in costs and provide better service, which impacted customer satisfaction.

Smaller insurers led the increase with an overall score of 77, up 1 point, followed by Blue Cross and Blue Shield, which was unchanged at 73. UnitedHealth made a huge leap, up 9 points to 72. Aetna rose 5 points to 70, but Wellpoint dropped 1 point to 67.

David Van Amburg, director of market research for the firm, told National Underwriter that improvement in the health insurance sector came as a surprise. In relation to the overall index score of 75.9 measuring all goods and services for sectors of the economy, health insurers have consistently fallen below the average, but showed significant improvement this go round.

"It's still not relatively spectacular compared to the other categories, obviously 75 is well below 79 and 80, and that's significantly below the national average...but it has been improving for the last couple of years," he said.

Besides trying to rein in costs and provide better service, he noted that the recent political debate may have shifted consumers perception of their health insures.

"In the midst of this debate, consumers themselves may be re-evaluating their insurance and having a shift in perceptions about just how good or poor their insurance may be," said Mr. Van Amburg. "[Consumers] may be reflecting a little more favorably on what [health insurance] they have, particularly in light of concerns about what may be coming. There is uncertainty and fear about the future of healthcare insurance and we think that there may be a bit of a general perception bubbling up that it may not be as bad as I use to think it was."

The survey contacted about 20,000 consumers by phone, at random, between October and December last year asking them about their recent experience with different sectors of the economy.

Additional survey information is available through the ACSI Web site at www.theacsi.org.

This story was update on Feb. 18 at 1:51 p.m. EST