According to the J.D. Power 2018 Insurance Shopping Study, the number one factor impacting customer satisfaction is the ability to understand different coverages.
Only 67% of consumers felt that their carrier had done a good job at ensuring they completely understood their policy coverages.
Furthermore, the companies that were able to meet customer expectations achieved a 9% lift in overall customer satisfaction scores.
“We’re entering an era of consumer-centric insurance that will likely be marked by a surge in new digital offerings and serious efforts by insurers to improve the insurance shopping experience,” said Tom Super, Director of the Property and Casualty Insurance Practice at J.D. Power.
Auto insurers, in particular, he added, are looking to win new customers with a more personalized experience that they hope will meet customers’ growing expectations for improved interactions.
The J.D. Power U.S. Insurance Shopping Study measures auto insurance shopping, purchase behavior and purchase experience among customers who recently purchased insurance. Satisfaction is measured in three factors: price, distribution channel and policy offerings.
The study is based on responses from over 15,000 shoppers who requested an auto insurance price quote from at least one competitive insurer in the past nine months and includes more than 50,000 unique customer evaluations of insurers.
In a blog post on the company’s website, Lemonade explained that the new product will be “unique and dynamically-generated, based on the choices the user made.”
For example, when the policy says that $20,000 of a property is covered, Lemonade’s Live Policy technology makes that sentence clickable so the user can instantly change it to meet their individual needs.
“If the user wants to add earthquake coverage, to take another example, they can initiate that from within the policy itself, and the policy will morph to include earthquake coverage,” the blog post stated.
Although the project is still in its design phase and is fraught with regulatory and legal challenges, the overall goal of the initiative is exactly on target with consumer wants and needs.
In addition to the ability to understand coverages, there are several other factors that define a customer’s insurance shopping experience.
Below are more key findings from the study:
Brand reputation is a top driver. Brand reputation is the top driver of consideration, contributing 29% of what influences an insurance shopper to research an insurer’s offerings.
Accordingly, the top 10 insurers in terms of total market share now write 72% of all business in the country, up from 64% in 2000. While a strong brand can help boost traffic, a strong value proposition remains essential in driving quote and close rates.
Delivering a consistent, omnichannel experience is critical. Among auto insurance shoppers, 45% use multiple channels when purchasing a policy, illustrating the need for insurers to develop digital capabilities that support the rest of their business functions, not replace them.
Insurtech customer awareness is still low. While insurtech companies have raised more than $7.1 billion globally since 2012, the level of awareness of alternative insurance models is still relatively low among insurance shoppers.
Just 6% of prospective customers indicate being aware of at least one of the following companies: Lemonade, Metromile, Trov and Sure. Less than half of shoppers who are aware of a given provider would consider doing business with them in the future.
Directs are winning the purchase experience battle. Overall satisfaction among shoppers who purchased insurance from companies that primarily sell directly to the customer is 846 (on a 1,000-point scale).
This compares with a score of 842 among shoppers who purchased insurance from companies that primarily sell through independent agents and 834 among those who bought from insurers who primarily sell through exclusive agents.
Gaining loyal insurance customers is easy if insurance companies take the time to listen to consumers’ wants and needs.
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