Toronto, Ontario — May 21, 2017 — Customer satisfaction with auto insurance in Canada increased for the second consecutive year, according to the J.D. Power 2017 Canadian Auto Insurance Satisfaction Study, despite nationwide premium increases.
“It does seem counterintuitive to see customer satisfaction increase as premiums rise, but customers are content to pay more when they believe they’re getting value for their money,” said Valerie Monet, Senior Director of the insurance practice at J.D. Power. “While low prices can be effective at getting new customers in the door, those customers are ultimately willing to pay higher premiums for exceptional service. Key performance metrics, such as making sure customers understand their policies and providing follow-up calls from customer service interactions, translate into higher satisfaction—regardless of an above-average premium.”
Across all study regions, price satisfaction and the median annual premium per vehicle are increasing. Reported premiums are up 17 percent in Quebec, 16 percent in the Atlantic region, 11 percent in Alberta; and 1 percent in Ontario over the past two years. Notably, the lowest reported premium increases are in Ontario, indicating that these customers may finally be realizing Ontario’s Auto Insurance Rate Reduction Strategy to reduce premiums. New vehicle prices and costly options are driving premiums higher, but the reduction strategy seems to be slowing premium increases in other provinces.
Price satisfaction is 63 index points higher (on a 1,000-point scale) among auto insurance customers who are paying premiums above the regional median and who completely understand their policies vs. those who are paying less than the regional median and who do not understand their policies.
Of the 32 percent of auto insurance customers who are aware their insurer offers telematics, just 8 percent are currently participating in safe driver discount programs that are monitored by in-vehicle computers.
Overall satisfaction with Canadian auto insurers averages 784, up 26 points from 2016. Key drivers of the performance improvement are increased understanding of policies and what is covered and better overall customer service.
The Canadian Auto Insurance Satisfaction Study measures customer satisfaction across five factors. In order of importance, these are: non-claim interaction; price; policy offerings; billing and payment; and claims. The study is based on responses from nearly 11,000 auto insurance policyholders.