Finds that Customer Satisfaction is Just as Important as Price to
Two recent studies of 20 major insurance companies revealed that
while 33 percent of consumers shop for insurance based on price,
nearly 75 percent of this group ultimately switches carriers due
to poor customer service. The 2007 Insurance Shopping StudySM and
the National Auto Insurance Study were conducted by J.D. Powers
& Associates utilizing data from the last seven years.
"This suggests that when a customer becomes dissatisfied with
their incumbent carrier, they are more motivated to shop and switch,"
says Jeremy Bowler, senior director of the insurance practice at
J.D. Power and Associates. "In contrast, while many shop to verify
they are getting a competitive price, this group is less likely
to switch insurers."
When asked what price would encourage them to change insurers,
customers of insurers rated as "high-satisfaction," 44 percent answered,
"I wouldn't switch for any price." Only 27 percent in the "low-satisfaction"
group answered similarly.
Satisfaction in the study was based on five factors: policy offerings,
price, billing and payment, interaction and claims. Nineteen percent
ranked policy offerings as most important to them, while only 12
percent ranked the claims-handling process as crucial.
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