Erie Insurance ranks highest among auto insurers in providing a satisfying purchase experience, according to the J.D. Power 2017 U.S. Insurance Shopping Study.
The Insurance Shopping Study provides a detailed look at the customer experience in shopping for a new auto insurance policy. It explores what prompts someone to shop for insurance and which factors contribute to the purchase decision. J.D. Power measures three factors to determine overall satisfaction: price, distribution channel and policy offerings.
Erie Insurance ranked first with a score of 879 out of a possible 1,000 points.
“In this digital age, we strive to provide our agents with the right tools to reach customers in ways they prefer and expect, but still reflect our hallmark of service,” said Tim NeCastro, president and CEO of Erie Insurance. “A customer might start an insurance search online, but we believe it should end with a handshake.”
This marks the fifth consecutive year Erie Insurance has ranked highest in the study. American Family ranks second (869), followed by The Hartford (861), Automobile Club Group (852) and Amica Mutual (850).
At the bottom of the customer satisfaction spectrum were Progressive, 21st Century and Auto Club of Southern California Insurance Group. Ranking slightly higher were Allstate, Nationwide and State Farm, all of which fell into the “About Average” category.
Auto Insurers Face Shifting Public Perception
The J.D. Power study also offers an assessment of the overall automotive insurance market, concluding that the industry is at an “inflection point.”
While insurance premiums are rising, fewer consumers are shopping for auto insurance, and new-customer acquisitions rates are flat.
“Due to stagnant auto insurance shopping activity and modest rate increases, these insurers have come to rely more and more on their level of customer service, personalized advice and knowledgeable agents to gain new customers and retain old ones,” J.D. Power concludes.
Here’s the bottom line: The ability of insurance carriers to explain their coverage and other services – and differentiate themselves from their competitors – is becoming more important.
J.D. Power research shows that average auto insurance premiums have been increasing 2 to 3 percent annually in recent years. Shopping activity started to slow in 2016, and that trend continues in this year’s study. Meanwhile, customer-acquisition rates and new-quote volume are flat, according to J.D. Power.
The research firm notes that there’s a growing public perception that auto insurance is a commodity. As auto insurers struggle to compete on price, they’re being forced to differentiate based on factors such as brand reputation, agent recommendations, product and service to drive new business sales, J.D. Power concludes.
The study shows that the key performance indicator (KPI) that has the greatest influence on customer satisfaction is ensuring that customers completely understand their coverage.
“The auto insurance industry is at an inflection point where customer patterns and behaviors are on the verge of shifting,” said Greg Hoeg, vice president of U.S. insurance operations at J.D. Power. “To survive this period of price stagnation, insurers must develop strategies to be able to better differentiate not just to acquire new customers, but also to acquire customers with desirable risk profiles in order to maintain profitability.”