Canadian Auto Insurers Must Build Brand Awareness
By: Jeff Youngs, 5/7/2014
The study finds that 20% of Canadian consumers shop for a new auto insurance carrier each year, but only 10% switch auto insurance carriers after submitting an average of 1.5 quote requests per person. As a result of the low quote request rate, each auto insurance company conquests less than 1% of those consumers shopping for new insurance. Brand awareness, according to the study, is the reason auto insurance companies experience difficulty in attracting new customers.
"Even the largest national insurance companies have limited awareness," said Jeremy Bowler, senior director of the insurance practice at J.D. Power. "Some of the big carriers may be well-known in one city or province, but have little or no awareness outside of that market. To grow their business, they need to build brand awareness, which traditionally requires significant advertising investment."
The 2014 Canadian Auto Insurance Satisfaction Study finds that customer satisfaction with auto insurance companies declined in 2014 compared with 2013. Price is not the cause for this decline in satisfaction. In fact, survey respondents reported an increase in satisfaction with price, suggesting that regional laws regarding auto insurance are causing price to have less impact on overall customer satisfaction.
Rather, survey respondents cited the following causes for a decline in satisfaction with their insurance companies, listed in order of greatest impact: Claims, Interaction, and Billing and Payment. Because these represent the greatest areas of dissatisfaction, when Canadian auto insurers attract new customers the companies must ensure satisfaction with critical customer touch points such as filing claims, non-claim contact initiated by the customer, and renewal notices.
The 2014 Canadian Auto Insurance Satisfaction Study examines customer satisfaction in Alberta, Ontario, and Quebec. The highest-ranked insurance provider in Alberta is Co-operators, in Ontario is Belairdirect, and in Quebec is The Personal.