Satisfaction among Home Insurance Providers for a Second Consecutive Year

TORONTO - As increasing numbers of auto insurance policyholders experience rate increases, satisfaction declines substantially among those customers who were not notified of the increase in advance, according to the J.D. Power and Associates 2009 Canadian Home and Auto Insurance Customer Satisfaction Study(SM) released yesterday.

The study finds that 38 percent of auto insurance policyholders report experiencing a rate increase in 2009, up from 33 percent in 2008. Among the 58 percent of policyholders who were notified of a rate increase in advance, satisfaction averages 723 on a 1,000-point scale. Satisfaction averages only 659 points among policyholders who didn't receive any advance notification of a rate increase.

"A rate increase tends to be a moment of truth for insurance policyholders and their providers," said Lubo Li, senior director and practice leader of Canadian financial services and insurance at J.D. Power and Associates. "Insurers that take proactive measures to notify policyholders in advance may help to minimize the negative impact of a rate increase. For example, following premium adjustments in Ontario adopted by many insurers earlier this year, 43 percent of auto insurance customers in the province experienced a rate increase. However, only 59 percent of those customers were notified in advance, driving a considerable decline in satisfaction. As these rate increases occur in other provinces, proactive communication to policyholders may mitigate the negative impact as seen in Ontario."

Policyholders in 2009 report premium increases of $200 per vehicle, on average, compared with their premiums in 2008. Increases in prices or premiums tend to have a negative impact on customer loyalty rates, as 31 percent of policyholders in 2009 report shopping for a different provider. Only 43 percent of policyholders say they "definitely will" renew with their current provider, down from 46 percent in 2008. In addition, nearly one-fourth of policyholders say they "probably will" or "definitely will" switch providers, compared with 19 percent in 2008.

The study, now in its second year, measures auto and home insurance policyholder experiences with their primary insurers. Customer satisfaction is measured for both auto and home insurance providers across five factors: customer service; price/premium; policy offerings; billing/payment; and claims.

Auto Insurance Rankings and Findings

Belairdirect ranks highest in customer satisfaction among private full-coverage automotive insurance providers(1) with a score of 753 on a 1,000-point scale, and performs particularly well in policy offerings, price/premium and customer service. Alberta Motor Association (741) and TD Insurance Home and Auto (725) follow in the rankings.

Satisfaction with auto insurance providers remains stable across the industry at 703 in 2009, compared with 701 in 2008. The study also finds that the frequency of auto claim filing has increased, as nearly 17 percent of customers filed a claim within the past year, compared with 12 percent in 2008.

Home Insurance Rankings and Findings

BCAA ranks highest among home insurance providers(2) for a second consecutive year, with a score of 783. BCAA performs particularly well in policy offerings, price/premium and customer service. Personal and State Farm, in a tie, follow BCAA in the rankings with a score of 768 each. Overall satisfaction with home insurance providers increases to an average of 737, up from 728 in 2008.

The 2009 Canadian Home and Auto Insurance Customer Satisfaction Study is based on responses from 7,713 auto insurance policyholders and 5,170 home insurance policyholders. The study was fielded in August 2009.