One of the most important factors for any successful business is to ensure customer satisfaction. As with any business, insurance companies need to be able to understand their clients’ needs. With the increasing number of insurance companies competing for customers, understanding customer needs and trends has become a necessary tool to achieving quality customer satisfaction. A recent study by J.D. Powers and Associates indicates that customer satisfaction with homeowners insurance is an area that needs improvement.
Insurance Customer Satisfaction
According to the J.D. Power and Associates 2008 “Homeowners Insurance Study” released Oct. 6, 2008, a survey of more than 12,900 homeowners insurance policyholders conducted in May and June 2008 revealed that customer satisfaction remains flat.
The study centered on five areas that included: policy offerings, price, billing and payment, interaction, and claims. The study has revealed a number of important statistics:
- Customer satisfaction with homeowners insurance during the past five years shifted only one index point from an average score of 753 on a 1,000-point scale in 2004 to 752 in 2008.
- Satisfaction levels are higher among homeowners who are offered an annual policy review.
- Satisfaction levels are higher among policyholders who bundle multiple policies with their homeowners insurance provider.
- In 2008, 42 percent of homeowners report experiencing an increase in premiums.
The J.D. Power and Associates study reports a number of important trends:
- While a premium increase can have a negative impact on customer satisfaction, the adverse effects can be significantly reduced through efficient notification to policyholders followed by a discussion of policy alternatives.
- The lack of improvement in customer satisfaction with homeowners insurance providers is driven by declines in scores in the claims and pricing factors.
- “Catastrophic storms that have occurred during the past five years have motivated many homeowners insurance providers to limit their exposure in the geographic areas that are most at risk,” said Jeff Leiman, senior director of the insurance practice at J.D. Power and Associates. “As a result of heavy losses, coverage in the affected areas is more difficult to obtain and policies are more expensive nationwide.”
Source: J.D. Power and Associates
The results of the J.D. Power and Associates Study show that there are clear areas that need attention when improving customer satisfaction. When one is searching for homeowners insurance it is important to consider such aspects as premium cost, geographic location, and an insurance company’s willingness to engage in an annual policy review.