NU Online News Service, Dec. 22, 3:46 p.m. EST
Customer satisfaction declined in the finance and insurance sector, according to the latest monthly University of Michigan American Customer Satisfaction Index (ACSI), but property and casualty insurers may be doing a better job at serving consumers than they think.
In the aggregate, customer satisfaction with the finance and insurance sector (including banks, credit unions, property and casualty, and life and health insurance) declined 1.3 percent to an ACSI score of 76.1. Declining customer satisfaction with health insurance dampened small improvements for life insurance and banks.
So how did p&c insurers fare?
ASCI's survey shows that customer satisfaction with the p&c insurance industry in December 2010 is tied with life insurance and credit unions for the highest ACSI score in financial services with an 80.
ASCI releases industry results monthly and updates the national index quarterly. It measures customer expectations, perceived quality and perceived value of companies in various industries on a 0-100 scale.
Since ACSI began rating p&c insurance in 1994, overall satisfaction with the industry has declined by 2.4 percent.
Between 1994 and 2010, the p&c industry's rating has ranged from a low of 75 to a high of 82 for the baseline measurement taken back in 1994.
Interestingly, the p&c industry scored its next highest ASCI ratings in the four most recent years, 2007-2010 (with scores of 81 in 2008 and 80 in 2007, 2009 and 2010).
The latest ASCI scores appear to debunk the notion that customer satisfaction with the p&c industry is low. A couple of observations are worth considering.
Not surprisingly, health insurance has taken a hit, with customer satisfaction falling 2.7 percent to 73 in December 2010. Sharp increases in premium costs and deductibles are the reason, according to ASCI.
ASCI commented that p&c and life insurance typically do better with customers compared with health insurance because premiums are lower. Policyholders also have fewer reasons to interact with their insurance companies, particularly for life insurance, where premiums tend to be fixed over the duration of a policy, ASCI said.
This latter point may not be so true for p&c insurance, where consistent service as well as price appear to drive greater stability in customer satisfaction ratings.
When ASCI's national index update is released in January 2011, we'll see how p&c insurance matches up to 45 other industries.
Other sectors rated by ASCI include utilities, e-business, retail trade, manufacturing and transportation. All provide important services, but insurance is the only one where the payment of claims and handling of those claims play a key role in determining customer satisfaction.
There is always room for improvement, but it could just be that based on ACSI scores, p&c insurers are doing a better job of meeting customer satisfaction than they think.
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