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Rates Go Up, But So Does Satisfaction: J.D. Power

Grey Power, Intact lead customer satisfaction survey.

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Auto insurance customers are more satisfied with insurance pricing, product offerings and claims service overall in 2010 than they were last year–and the two insurers came out on top in their sectors, according to the 2010 Canadian Auto Insurance Customer Satisfaction Survey findings.

Country-wide, satisfaction rose to 727–on a 1,000 point scale–up from 701 in 2009.  Among insurers in the private, full-coverage auto sector, Grey Power earned the top score–756–while Intact Insurance led in the Quebec private auto segment, with a score of 842.

RBC Insurance (744) and Johnson Insurance (738) also earned high marks overall.

General scores for each sector went up as well: satisfaction rose by 15 points in the private full coverage segment, by 50 points in the Quebec private auto segment and by 27 points in the government-run sector.

Rising rates

J.D. Power analysts point to improved satisfaction with pricing as a major factor behind the overall uptick, even though one in four overall respondents and almost half of the respondents in the private auto segment reported premium increases in 2010.

Policyholders facing increases had an overall satisfaction level of 721, compared to an average level of 628 among those who didn’t.

Better communication–and explanations from insurers–could be the reason, Lubo Li, senior director and practice leader of Canadian financial services and insurance at J.D. Power and Associates, points out.

“Auto insurance providers may be able to take lessons learned about rate increase communication and apply them to their advantage when new options under the Ontario insurance reforms take effect on September 1,” Li said in a statement accompanying the findings. “Although the new mandates will likely lower premium amounts for many policyholders, any changes in rates–whether positive or negative–should be communicated to customers well in advance to avoid any confusion or surprise.”