Imagine one of your largest expenses going up more than 20% last year and almost as much the year before. Now imagine that expense buys you something that you don’t truly understand, and those who have sold it to you haven’t provided an adequate explanation of what they are selling you in terms you can understand.
Well, you just imagined the typical auto insurance policy and the average American’s experience with their auto insurer. While many (perhaps most) of us in the industry want to think our customers understand what they are buying and have the right coverage for their needs, decades of J.D. Power research shows this is not the case.
In fact, the most important KPI (diagnostic driver of overall customer satisfaction) for both auto insurance and homeowners insurance policies is Ensure customers completely understand policy/what it means or covers. Despite this importance, just over half of auto and home insurance customers (56% and 55%, respectively) tell us they completely understand their policy.
Policy understanding is not only important to tenured customers but to new customers as well. New results from the J.D. Power 2024 U.S. Insurance Shopping StudySM show this is the second most important KPI among those who recently purchased an auto insurance policy from a new insurer. As U.S. drivers navigate an increasingly complex auto insurance landscape while watching their premiums go up like they have never experienced before, it is more critical than ever for insurers to focus on their communication strategy. Insurers that hear this clarion call from consumers and find a way to explain, in consumer-friendly terms, what their auto and homeowners policies entail, stand to be rewarded with much more satisfied customers – which translates into customers who are less price sensitive and more loyal to the insurer who took the opportunity to clearly explain the policy.
- Which brands are rolling out exemplary communications to new customers?
- How is your brand measuring up?
- What other KPIs are driving the insurance shopping experience?
Subscribers to the 2024 U.S. Insurance Shopping Study have access to the answers to these questions and more. Let’s connect to discuss subscription details so you can integrate this intelligence into your customer strategy.
What’s New?
While the J.D. Power 2024 U.S. Insurance Shopping Study investigates the full panoply of issues with acquiring profitable new customers, this year we explore many new topics affecting insurers and consumers alike in today’s challenging market, including:
- Third parties involved in quoting/binding policies
- Embedded insurance
- Usage based insurance
- Insuring battery electric vehicles
