J.D. Power: Personal Lines Agents Missing out on Opportunities in Renters Segment

September 30, 2013

Insurance agents who only focus on homeowners insurance customers are missing a golden opportunity to build long-term relationships with renter customers as their insurance needs grow due to life or circumstance changes—such as having a family or purchasing a home or additional car—according to the J.D. Power 2013 U.S. Household Insurance and Bundling Study.

The 2013 U.S. Household Insurance and Bundling Study was based on 21,167 responses from customers who may have the following insurance product lines: homeowners; renters; individual life insurance; recreational vehicle; personal liability umbrella; and secondary residence.

KEY FINDINGS

  • While 25 percent of consumers rent their primary residence, 46 percent of renters are uninsured.
  • Satisfaction with insurers is higher among renters than among homeowners
  • (809 vs. 787, respectively, on a 1,000-point scale).
  • Price is the leading driver of the satisfaction gap: price satisfaction is a significant 45 points higher among renters than among homeowners.
  • Renters place more importance on website (22 percent) and assisted online (11 percent) interaction channels than do homeowners, which is influenced by the younger customer base in the renter insurance market.
  • State Farm captures the largest share of the renter insurance market (26 percent), followed by Allstate (12 percent) and USAA (10 percent).
  • Customer retention rates with their current insurer are higher among renters who bundle an auto policy at 91 percent compared to 67 percent of renters who do not bundle an auto policy.

“Many insurance agents focus their time selling high-dollar products, such as auto and homeowners, with higher commissions instead of the average $200 per year renters policy,” said Jeremy Bowler, senior director of the global insurance practice at J.D. Power. “This is shortsighted because agents who satisfy the large renter population today are more likely to retain and service their growing household insurance needs over time.”

Rankings
Overall Customer Satisfaction Scores
J.D. Power.com Power Circle Ratings
(Based on a 1,000-point scale) For Consumers
Homeowners Segment
Amica Mutual 842 (5)
State Farm 813 (4)
Auto-Owners Insurance 812 (4)
Erie Insurance 811 (4)
Automobile Club of Southern California 808 (4)
Encompass 798 (4)
American Family 797 (4)
Progressive 796 (4)
COUNTRY 795 (3)
Allstate 789 (3)
GEICO 789 (3)
The Hartford 787 (3)
Homeowners Average 787 (3)
NCNU Insurance Exchange 786 (3)
Nationwide 780 (3)
MetLife 778 (3)
Safeco 778 (3)
Automobile Club Group 776 (3)
CHUBB 768 (2)
The Hanover 766 (2)
Liberty Mutual 762 (2)
Travelers 756 (2)
__________________________
USAA* 894 (5)
*USAA is an insurance provider open only to U.S. military personnel and their families and therefore is not included in the rankings.
Homeowners Segment: Included in the study but not award-eligible due to localized availability and/or not meeting minimum sample requirements are Alfa Insurance, Allied, Cincinnati Insurance, Fireman’s Fund, Homesite, Mercury, North Carolina Farm Bureau, Shelter and Tennessee Farm Bureau.
Renters Segment
Nationwide 823 (5)
American Family 817 (5)
Automobile Club of Southern California 814 (3)
State Farm 811 (3)
Renters Average 809 (3)
Allstate 807 (3)
Progressive 799 (3)
GEICO 794 (2)
Liberty Mutual 773 (2)
Farmers 768 (2)
Travelers 752 (2)
__________________________
USAA* 901 (5)
*USAA is an insurance provider open only to U.S. military personnel and their families and therefore is not included in the rankings.
Renters Segment: Included in the study but not ranked due to not meeting minimum sample requirements are Amica Mutual, Automobile Club Group, Erie Insurance, MetLife, NCNU Insurance Exchange, Safeco and The Hartford.

Power Circle Ratings Legend
5 – Among the best
4 – Better than most
3 – About average
2 – The rest

The U.S. Household Insurance and Bundling Study study was fielded from June 10, 2013, through July 12, 2013. The study examines overall customer satisfaction in each of these product lines; however, the study only ranks performance in two personal property insurance segments—homeowners and renters. Both index scores are comprised of five factors: interaction; policy offerings; price; billing and payment; and claims.

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