Homeowners and renters insurance companies generally competeon price, but improving customer satisfaction is now gaining importance as abasis for competition, according to the J.D. Power 2016 U.S. Home InsuranceStudy.
The industry is going through "a stagnant or softcycle," as average annual premiums for homeowners insurance and rentersinsurance remained largely unchanged in the past few years, according to thestudy.
"Insurers have shifted their competitive focus toimproving communication, process efficiency, and being easier to work with as away to solidify and grow their business," said Valerie Monet, director ofthe insurance practice at J.D. Power.
As a result, the report said, customer satisfaction hasimproved. The survey points to overall customer satisfaction with homeownersinsurers of 804 and overall satisfaction with renters insurance companies of825, on a 1,000 point scale, which represents a 17-point year-over-yearincrease for each segment. The largest driver for the overall change incustomer satisfaction was a 25-point increase in satisfaction with policyofferings, followed by a 19-point increase in satisfaction with claims.
In the homeowners insurance segment, rankedhighest with a score of 864, followed by Auto Club of Southern CaliforniaInsurance Group at 835, and Cincinnati Insurance Co. at 828.
In the renters insurance segment, ranked highest with a score of 841, followed by AmericanFamily at 836 and Erie InsuranceCo. at 834.
Insurers could benefit financially by improving customersatisfaction as satisfied customers are more likely to increase coverage orpurchase additional insurance with savings that result from stable premiums,said Monet.
The study measures overall customer satisfaction with homeownersand renters insurance on the basis of five factors: interaction, policyofferings, price, billing process and policy information, and claims.