Discussions:101,499. |. Messages:1,352,505. |. Members:85,225


Amica Mutual tops in homeowners customer satisfaction while The Hartford ranks highest among renters

Brian Anderson

COSTA MESA, Calif. —Amica Mutual earned the highest ranking in homeowners insurance customer satisfaction for 15th consecutive year while The Hartford ranks highest in renters insurance for the first time, according to the J.D. Power 2016 U.S. Home Insurance Study, released Sept. 19 (see full rankings below).

With homeowners and renters insurance premiums remaining stable, the study notes insurers are focusing on the customer experience to differentiate themselves from the competition.

Historically, price has been the leading basis of competition for many insurers. The industry is currently in what could best be described as a stagnant or soft cycle, with rates remaining relatively stable. On average, customers report an annual premium charge of $1,186 for homeowners insurance and $259 for renters insurance in 2016, with both remaining relatively unchanged over the past few years.

“Insurers have shifted their competitive focus to improving communication, process efficiency, and being easier to work with as a way to solidify and grow their business,” said Valerie Monet, director of the insurance practice at J.D. Power. “Improvements in processes and customer service benefit everyone — the customer and the insurer. When competing on price, it’s incredibly difficult to provide an outstanding customer experience.”

The shift in insurers’ strategic priorities has resulted in a significant increase in satisfaction. Overall customer satisfaction with homeowners insurers is 804 (on a 1,000-point scale) and overall customer satisfaction with renters insurance companies is 825, each a 17-point increase from 2015. Monet noted that while in the homeowners and renters segments satisfaction with price is up (+16 points) because rates are stable, the increase in satisfaction with policy offerings (+25) is actually a much larger driver of the overall annual change in satisfaction. Improved communication is helping customers to see the value in the products they purchase. Among homeowners customers, satisfaction also improves significantly in claims (+19 points) and interaction (+10).[1]

“By pleasing their current customers, which builds loyalty and advocacy, insurers benefit financially,” said Monet. “Customers don’t often just pocket the savings that result from stable premiums. If they are happy with their current insurer, they will frequently modify their policy by increasing their coverage or purchasing additional insurance with the savings, such as adding riders for high-priced items like jewelry, artwork and family heirlooms.”

The young and the wealthy

Gen Y[2]—now the largest generation in the United States at 75 million or 31% of the population[3] and the largest group of home buyers at 35%[4]—is a sizable force in the U.S. economy today. Over the next decade, Gen Y will become even more influential as they enter their prime years of building assets and accumulating wealth, and, therefore, will likely represent a lucrative segment for insurers to target.

“These young, affluent consumers create an opportunity for insurers looking to grow their business,” said Monet. “Gen Y, across all of its income levels, has the greatest affinity for using technology in all aspects of their lives, given they grew up using technology 24/7. Combining this with the fact that HNWIs typically have more complex risk and insurance needs than the average policyholder suggests it is important for insurers to understand how to meet the needs of HNWI Gen Y customers and modify their approach accordingly.”

While HNWI Gen Y customers are more satisfied overall with their homeowners insurance than are HNWI Boomers, they are less satisfied with interaction with their insurer, specifically with their agent experience. HNWI Gen Y has a greater number of contacts with their insurer vs. HNWI Boomers, resulting in the interaction factor having a heavier weight in the overall satisfaction index among HNWI Gen Y vs. Boomers (34% vs. 27%, respectively). Focusing on improving agent and broker interactions will be critical for insurers looking to attract and retain HNWI Gen Y customers.

“Although many insurers have made great strides in improving the customer experience, there is still significant opportunity to improve customer perceptions of both products and services,” said Monet. “New entrants into the market, such as on-demand insurance, will likely result in shifts in customer expectations. Customer satisfaction is going to be more important than ever before for competitive position and growth.”

On-demand insurance allows customers to insure items just when they need it, turning it on and off, frequently using their smartphone. Often called “just-in-time coverage,” consumers can insure, for example, their bike only while they’re riding it, their skis during a weekend trip or their laptop when used away from the home.

“On-demand insurance is gaining popularity in markets outside the United States and is slowly growing in the United States,” said Monet. “It’s important that insurers know which segments of their customers would be interested in such insurance products and perhaps develop a similar product to compete in that space.”

The study examines overall customer satisfaction with two distinct personal insurance product lines: homeowners and renters. Satisfaction in the homeowners and renters insurance segments is measured by examining five factors: interaction; policy offerings; price; billing process and policy information; and claims. Satisfaction is calculated on a 1,000-point scale.

Insurance Rankings

Amica Mutual ranks highest in the homeowners insurance segment with a score of 864.Amica Mutual performs particularly well in the billing process and policy information, interaction, policy offerings and price factors.

Auto Club of Southern California Insurance Group ranks second (835), followed by Cincinnati Insurance (828), GEICO (826) andAuto-Owners Insurance (824).

The Hartford ranks highest in the renters insurance segment with a score of 841. The Hartford performs particularly well in the billing process and policy information, interaction and policy offerings factors.

American Family ranks second (836), followed by Erie Insurance(834) and State Farm (832).

For more information about the 2016 U.S. Home Insurance Study, visithttp://www.jdpower.com/resource/jd-power-us-household-insurance-study.


[1] Satisfaction with billing process and policy information cannot be trended due to methodology changes

[2] J.D. Power defines generational groups as Pre-Boomers (born before 1946); Boomers (1946 to 1964); Gen X (1965-1976); Gen Y (1977 to 1994); and Gen Z (1995-2004).

[3] Source: Pew Research Center

[4] Source: 2016 National Association of Realtors Home Buyer and Seller Generational Trends



Leave a Comment