STUDY_AUTO

2013 Canadian Auto Insurance Satisfaction Study Results

5/3/2013
Increases in premiums over the past year appear to have led to a decline in overall customer satisfaction with their primary auto insurers, according to the recently released J.D. Power & Associates 2013 Canadian Auto Insurance Satisfaction Study.SM At the same time, the study shows that more customers are interacting with their insurers via the Web, and more of them are contacting their insurance companies through multiple channels.

According to the 2013 study, the percentage of customers using non-traditional channels, such as a provider's website, has increased by up to seven percentage points from 2012, accounting for as much as one-third of all customer interactions, depending on the particular region. Among customers who contact their insurance company, 49% use multiple channels to contact their provider.

"An increasing number of consumers are going to the Web for their first point of contact to gather information," said Jeremy Bowler, senior director of the insurance practice at J.D. Power & Associates. "Auto insurers in Canada are aware of this major shift and need to continue to enhance their digital presence."

Bowler urges auto insurers to enhance their digital capabilities and promote these options, not only so that consumers can research and buy insurance when and where they want, but also so that customers can do the same when self-servicing a policy.

The 2013 Canadian Auto Insurance Satisfaction Study ranks customer satisfaction in three regions: Ontario/Atlantic; Western (British Columbia; Alberta; Saskatchewan; and Manitoba); and Quebec. The study measures five factors (in order of importance): interaction; price; policy offerings; billing and payment; and claims. According to the study, the Ontario/Atlantic region has increased its index score by 5 points (on a 1,000-point scale) from 2012, primarily due to flat or stable premiums. Bundling--the practice of buying multiple insurance policies from a single insurer, thereby earning a discount--is also up in this region. Although customers in the Ontario/Atlantic region are the most price-sensitive of those surveyed, fewer customers reported premium price increases there, in 2013, than in other regions.

According to the study, customer satisfaction in the Ontario/Atlantic region has increased its index score by 5 points (on a 1,000-point scale) from 2012, primarily due to flat or stable premiums. Bundling--the practice of buying multiple insurance policies from a single insurer, thereby earning a discount--is also up in this region. Although customers in the Ontario/Atlantic region are the most price-sensitive of those surveyed, fewer customers reported premium price increases there in 2013 than in other regions.

Grey Power ranks highest for a second consecutive year in the Ontario/Atlantic region with a score of 794, followed by Belairdirect (782) and The Personal (780).

Customer satisfaction declines by 9 points in the Western region from 2012, evidently due to a higher number of insurer-initiated premium increases. Some 27% of customers in this region reported an insurer-initiated increase in 2013, compared with 25% in 2012.

Canadian Direct Insurance ranks highest in customer satisfaction in the Western region for a third consecutive year with a score of 800. BCAA (794) ranks second, and is followed by Co-operators (776).

The Quebec region, which achieved the highest customer satisfaction score among all regions in 2012, shows the largest year-over-year decline for 2013 (-25 points). The most significant declines appear in satisfaction with price (down 45 points) and policy offerings (down 27 points).

The Personal ranks highest in the Quebec region with a score of 835. Following in the rankings are La Capitale (830) and Promutuel (829).

"Although overall satisfaction has increased in the Ontario/Atlantic region, the uptick in insurer-initiated premium increases in the Western and Quebec regions has taken a toll on overall satisfaction," said Lubo Li, senior director of the services and emerging industries division at J.D. Power & Associates.

Although websites are gaining importance as a point of contact with Canadian auto insurers, satisfaction with them (at 746 points) is low compared with customer satisfaction with dealing directly with agents (818) or call centre representatives (795).

"We see from analysis and our research that continued investment in websites should be a focal point for insurers since it offers an opportunity to provide convenience and efficiency to customers, which can lift satisfaction and hence loyalty," Bowler said. "Insurers that are able to meet the current level of customer expectations related to website usability may be able to trim costs with their call centres--through a reduction in call volume--and provide efficient service, which can help them realize a return on investment."

Customers born between 1977 and 1994--and thus considered "Generation Y"--are currently the most frequent users of websites (34% usage rate). Generation Y customers are more apt to purchase a policy directly through an insurer, rather than through an agent/broker. However, similar to older customers, they prefer to speak with a person at a call centre or an agent/broker if they have a more complex issue to consider, such as discussing pricing options.

Based on the 2013 Canadian Auto Insurance Satisfaction Study, J.D. Power and Associates offers the following consumer tips:

  • Use multiple methods to shop for auto insurance. Pre-shop by visiting various insurers' websites to see what they offer, then contact agents directly or through call centers.
  • Check with friends and family for recommendations regarding specific insurance agents or companies.
  • Be prepared for premiums to rise each year, although they won't always. Ask your agent what you should expect in the way of price increases.

The Canadian Auto Insurance Satisfaction Study measures insurance customer experiences with their primary auto insurer in Canada. The 2013 study is based on responses from 11,257 auto insurance policyholders. The study was fielded from February 20, 2013 to March 25, 2013.

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