Overall customer satisfaction with homeowners insurance companies is the highest in the 12 years J.D. Power and Associates has measured it, driven in part by the practice of bundling auto and homeowners insurance policies.
Overall satisfaction averages 785 in 2012 (on a 1,000-point scale), according to the research firm. That’s up 16 points from 2011.
Additionally, satisfaction improves by 19 points among customers who bundle their auto and homeowners policies with the same insurer, compared with an improvement of 10 points among customers who have their auto policy with another insurer, according to J.D. Power and Associates 2012 U.S. National Homeowners Insurance Study.
Satisfaction improves among customers who bundle other policies with their homeowners policy, contributing to higher overall customer satisfaction with homeowner insurance companies.
Now in its twelfth year, the study measures customer satisfaction by examining five factors: billing and payment; claims; interaction; policy offerings; and price.
Satisfaction is higher in all five factors year over year, with the greatest gains in the policy offerings and billing and payment factors (+35 points and +27 points, respectively). The gains in policy offerings are more pronounced among customers who bundle their auto and homeowners policies than among those who have their auto policy with another insurer (+39 points vs. +25 points, respectively). The competitiveness of discounts and the variety of coverage options are key differentiators among those customers who bundle their insurance.
“The increase in satisfaction with policy offerings is directly related to customer perceptions that insurers are doing a better job in offering the right coverage options at competitive prices when policies are bundled,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates. “Bundled policies not only may provide a reduced premium for customers, but may also be advantageous to both parties, as it allows customers to interact with a single insurer, potentially streamlining both billing and payment.”
While auto is the most typically bundled policy with homeowners, the study finds a direct relationship between bundling any additional products and higher satisfaction. Satisfaction among customers who insure only their home with their homeowners insurer is 712. However, when one additional product is bundled (typically an auto policy), satisfaction increases to 792. When four or more products are bundled with the insurer, satisfaction further increases to 861.
Not only does bundling increase satisfaction with homeowners insurance companies, but it also increases customers’ intent to renew their policy. Among customers who have homeowners insurance only, just 28 percent say they “definitely will” renew with their insurer. Among customers who bundle two policies, 46 percent say they “definitely will” renew with their insurer, and increases to 66 percent when four or more policies are bundled.
“Insurance companies have a tremendous opportunity to create loyal customers by delivering a satisfying bundling experience and deepening their penetration into the household,” said Bowler. “Once established, customers are inclined to keep their policies bundled. Additionally, they are more likely to add more products to their policy in the future.”
Amica Mutual ranks highest in satisfaction (859) for an 11th consecutive year among homeowners award-eligible insurance companies and performs particularly well in all five factors that contribute to overall customer satisfaction. Following Amica Mutual in the rankings are ACSC (AAA) (824) and Erie Insurance (822), 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.
Source: J.D. Power and Associates