Service Tops Price for Customers of Auto Insurance

By Lavonne Kuykendall
Dow Jones News Service

Drivers who were asked to rate overall satisfaction with their insurance provider gave more weight to customer service than price, according to the most recent J.D. Power & Associates ranking of auto insurers.

The survey asked consumers what they liked and disliked about their insurer, whether they had price-shopped or changed insurers in the past year, and what drove the change.

Customers generally gave higher scores to insurers that allowed them to resolve a claim or other issue with one phone call and insurers that gave them a discount for bundling home and auto insurance into one package, J.D. Power said.

The more phone calls a customer has to make to resolve a problem, the lower the overall score the insurer receives, said Jeremy Bowler, senior director of the insurance practice at J.D. Power. Giving customers a clear picture of any discounts they receive improves satisfaction, as does conducting an annual policy review to make sure coverage is up to date, Mr. Bowler said.

For the fifth year, consumers said they were more satisfied with their insurer, suggesting insurance-company efforts to improve are yielding results, Mr. Bowler said. He said higher satisfaction scores correlated to higher loyalty, with insurers ranked near the bottom more likely to see customers shopping around for a better deal.

The top scorer in the survey was Amica Mutual, which has slightly less than 1% of the auto-insurance market, but has led the survey since it was launched seven years ago. Amica's score of 871 out of a possible 1,000 points beat second-place insurer Erie Indemnity Co., which scored 825, and third-place finisher State Farm Mutual Automobile Insurance Co., the country's largest auto insurer, with 823.

Rounding out the top five were the Geico unit of Berkshire Hathaway Inc., the fourth-largest insurer nationwide and the only public company in the top five, and American Family Insurance, which tied with a score of 803.

Mr. Bowler said 22% of the 14,066 respondents said they price-shopped for a new provider last year, but only 9% actually made a change. There were many reasons why a customer would shop, Mr. Bowler said, including advertising or unhappiness with price. The most likely to actually switch are those who had a service problem rather than a price concern, Mr. Bowler said.

From: Dow Jones News Service (www.dowjones.com)