Posted on 05 Oct 2009
According to the J.D. Power and Associates 2009 National Homeowners Insurance Study(SM), for the first time in five years, overall satisfaction with homeowners insurance has increased significantly, driven by favorable customer perceptions of the value of their policies.
Now in its ninth year, the study measures customer satisfaction with homeowners insurance companies by examining five key factors: policy offerings; price; billing and payment; interaction; and claims.
Overall satisfaction with homeowners insurance companies averages 773 on a 1,000-point scale in 2009--increasing by 21 points from 2008. The overall increase is primarily attributable to substantial improvements in the price, policy offerings and billing and payment factors. In particular, satisfaction with price has improved most notably--increasing by 46 points from 2008.
Contributing further to improved perceptions of policy value are shifts in the perceived prevalence of discounts. The percentage of policyholders who report receiving discounts has increased in 2009 to 84 percent from 81 percent in 2008. Of the 27 insurance companies included in the study, 10 have experienced notable increases from 2008 in the proportion of their customers who report getting discounts. Policyholders who receive discounts are significantly more satisfied than those who either do not receive discounts or are unsure of the discounts they receive.
"To maximize the lift in satisfaction that discounts may bring, insurance companies must clearly inform customers of the number and types of discounts they are receiving," said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates. "Even if a customer's policy doesn't change, satisfaction may improve by more than 90 points when they're informed of the discounts they qualify for and are getting, compared with when they have no awareness of the discounts."
Amica Mutual ranks highest for an eighth consecutive year among homeowners insurance companies, performing particularly well in all five factors that contribute to overall customer satisfaction. Following Amica in the rankings are Auto-Owners, Erie Insurance and State Farm, respectively. USAA, an insurance provider open only to U.S. military personnel and their families and therefore not included in the rankings, also achieves a high level of customer satisfaction.
The study finds that more than eight in 10 customers report bundling multiple policies with their homeowners insurance company. Satisfaction with insurance companies' policy offerings increases with each additional policy purchased, with satisfaction averaging more than 170 points higher among customers with four or more policies with their insurer, compared with customers who hold only a homeowners policy with their insurance company.
"Keeping homeowners insurance customers well satisfied may pay dividends, as these customers are very likely to purchase additional insurance policies and other financial products from their insurer," said Bowler.
The study also finds that making improvements in overall satisfaction may have a strong positive impact on renewal and recommendation rates. For example, improving overall satisfaction from an average of 750 to 800 may result in a 10- to 15-percentage-point increase in the proportion of customers who say they "definitely will" renew their policies. Similarly, this improvement in satisfaction may also result in a 10- to 15-percentage-point improvement in the number of customers who say they "definitely will" recommend their insurer to others.
The 2009 National Homeowners Insurance Study is based on responses from more than 12,900 homeowners insurance customers. The study was fielded between April and June 2009.
J.D. Power and Associates will issue a white paper with in-depth analysis of the homeowners insurance claim experience in mid-November.
For more information, view homeowners insurance ratings, or read an article at JDPower.com.
Customer Satisfaction Index Ranking J.D. Power.com Power Circle Ratings (Based on a 1,000-point scale) For Consumers Amica Mutual 842 5 Auto-Owners 817 4 Erie Insurance 813 4 State Farm 805 4 Cincinnati Insurance 790 4 Alfa 789 4 Automobile Club of Southern California 789 4 The Hartford 789 4 Automobile Club Group 782 3 Shelter 781 3 American National Property & Casualty 777 3 COUNTRY 776 3 American Family 775 3 Chubb 775 3 Industry Average 773 3 Allstate 772 3 California State Automobile Association 768 3 Liberty Mutual 762 3 Nationwide 762 3 MetLife 759 3 Safeco 759 3 Encompass 752 3 Farmers 749 3 The Hanover 745 3 Travelers 735 2 Fireman's Fund 734 2 AIG 700 2 *USAA 900 5 *USAA is an insurance provider open only to U.S. military personnel and their families and therefore is not included in the rankings. Power Circle Ratings Legend: 5 - Among the best 4 - Better than most 3 - About average 2 - The rest
About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company operating in key business sectors including market research, forecasting, performance improvement, Web intelligence and customer satisfaction. The company's quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.
About The McGraw-Hill Companies
Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor's, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2008 were $6.4 billion. Additional information is available at http://www.mcgraw-hill.com.