Study Says Customer Service Tops for Policyholders

Despite a high level of public scrutiny and industry focus on premiums, customer service overshadows price as the most important driver of satisfaction among auto and home insurance policyholders in Canada, according to the J.D. Power and Associates 2008 Canadian Home and Auto Insurance Customer Satisfaction Study.

The inaugural study measures auto and home insurance policyholder experiences with their primary insurers. Customer satisfaction is measured for both auto and home insurance providers across five factors: customer service; price/premium; policy offerings; billing/payment; and claims.

The study finds that customer service accounts for 38 percent of satisfaction among home insurance policyholders, while price/premium accounts for only 17 percent. Even among auto insurance policyholders, where premiums are higher and price sensitivity is greater, customer service remains the most important driver—making up 28 percent of customer satisfaction, compared with 25 percent accounted for by price/premium.

Auto Insurance Rankings and Findings:

State Farm ranks highest in customer satisfaction among private full-coverage automotive insurance providers1 with a score of 757 on a 1,000-point scale, performing particularly well in customer service and billing/payment. Belairdirect (749) and Johnson Insurance (736) follow in the rankings.

The study finds 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 percent of overall satisfaction.

The study also finds that customer satisfaction benefits an insurer’s bottom line, as satisfied policyholders are more likely to renew their policy and to recommend their insurer to family and friends. 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.

Home Insurance Rankings:

Among home insurance providers, 2 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 (787) and Belairdirect (777) follow BCAA in the rankings.

The 2008 Canadian Home and Auto Insurance Customer Satisfaction Study is based on responses from 8,965 auto insurance policyholders and 5,687 home insurance policyholders. The study was fielded through a nationally representative online survey in August 2008.