J.D. Power Reports:One in 10 Canadian Customers Switch Auto Insurance Carriers

Belairdirect, Co-operators and The Personal Each Rank Highest In Customer Satisfaction in Their Respective Region

TORONTO--(BUSINESS WIRE)--One in five auto insurance customers in Canada have shopped for a new insurer in the past 12 months and 9 per cent have switched, according to the J.D. Power 2014 Canadian Auto Insurance Satisfaction Study^SM released today.

Ultimately, each insurance company conquests less than an average of 1 per cent of customers shopping for a new insurance policy. Brand awareness limits most carriers’ ability to attract shoppers, as they typically limit their search to an average of only 1.5 quotes.

“Even the largest national insurance companies have limited awareness,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power. “Some of the big carriers may be well-known in one city or province, but have little or no awareness outside of that market. To grow their business, they need to build brand awareness, which traditionally requires significant advertising investment.”

Once an insurer wins a new customer, every touch point they have with that customer is crucial and can be the difference between a loyal customer and a defector. Study findings show that the three most critical touch points are the annual or semi-annual renewal notice; when a customer contacts their insurer for non-claims-related reasons (62 per cent of customers have contacted their insurer either directly or through an agent in the past 12 months regarding a non-claim-related issue); and when a customer files a claim (12 per cent of customers filed an auto claim in the past year).

KEY FINDINGS

• Price, historically a key differentiator among insurance companies, is having less impact on overall customer satisfaction. Price satisfaction is highest in Quebec, primarily because the government insures against injuries to people, thus bodily injury coverage is not required for vehicle owners, keeping premiums lower than in other provinces. In Ontario, auto insurance is regulated by the Financial Services Commission of Ontario, which in 2013 implemented its Auto Insurance Cost and Rate Reduction Strategy, contributing to an increase in price satisfaction of 6 points (on a 1,000-point scale).
• The average growth rate among all insurers included in the study is 4 per cent. The largest growth rate is 24 per cent, while the largest attrition rate is 11 per cent.
• Across the three provinces in the study, overall customer satisfaction drops to 758 in 2014 from 766 in 2013. Declines in satisfaction with claims (-29 points), interaction (-13) and billing and payment (-12) account for the majority of the year-over-year drop. Price is the only factor in which satisfaction improves.

The study, now in its seventh year, measures insurance customer experiences with their primary auto insurer in Canada. Customer satisfaction is measured across five factors (in order of importance): interaction; price; policy offerings; billing and payment; and claims. Insurers are ranked in three provinces: Ontario, Alberta and Quebec.

Regional Rankings

Customer satisfaction in Alberta averages 744, down 3 points from 2013. Co-operators ranks highest in customer satisfaction in Alberta with a score of 782. Alberta Motor Association ranks second (770), followed by Johnson Insurance (754).

Customer satisfaction in Ontario averages 749, down 7 points from 2013. Belairdirect (784) ranks highest in Ontario, followed by CAA Insurance Company (778) and State Farm (773).

Customer satisfaction in Quebec improves 2 points in 2014 to 804. In Quebec, The Personal ranks highest for a second consecutive year, with a score of 837. La Capitale ranks second (821) and Desjardins General Insurance (805) third.

Study Rankings

Alberta

Overall Customer Satisfaction Index Scores (Based on a 1,000-point scale)		J.D. Power.com Power Circle Ratings^TM For Consumers
Co-operators	782	5
Alberta Motor Association	770	4
Johnson Insurance	754	4
Aviva Insurance	745	3
Alberta Average	744	3
Intact Insurance	740	3
Wawanesa	734	2
TD Insurance	734	2

Note: Included in the study but not ranked due to sample size are Allstate, Canadian Direct, Dominion of Canada, Economical Insurance, RBC Insurance and State Farm.

Power Circle Ratings Legend
5 – Among the best
4 – Better than most
3 – About average
2 – The rest

Ontario

Overall Customer Satisfaction Index Scores (Based on a 1,000-point scale)		J.D. Power.com Power Circle Ratings^TM For Consumers
Belairdirect	784	5
CAA Insurance Company	778	5
State Farm	773	4
Grey Power	767	4
Co-operators	763	4
Allstate	753	3
Dominion of Canada	752	3
Johnson Insurance	750	3
Ontario Average	749	3
The Personal	749	3
Desjardins General Insurance	748	3
Intact Insurance	747	3
Gore Mutual	747	3
RBC Insurance	746	3
Economical Insurance	740	3
TD Insurance	736	3
Aviva Insurance	729	2
Wawanesa	725	2
RSA	719	2

Note: Included in the study but not ranked due to sample size are Primmum and Zenith Insurance.

Quebec

Overall Customer Satisfaction Index Scores (Based on a 1,000-point scale)		J.D. Power.com Power Circle Ratings^TM For Consumers
The Personal	837	5
La Capitale	821	4
Desjardins General Insurance	805	3
Quebec Average	804	3
Intact Insurance	801	3
Industrial Alliance	800	3
Belairdirect	798	3
Aviva Insurance	794	3
L'Union Canadienne	793	3
National Bank Insurance	778	2
TD Insurance	777	2

Note: Included in the study but not ranked due to sample size are Allstate, Promutuel, SSQ General and Wawanesa.

The 2014 Canadian Auto Insurance Satisfaction Study is based on responses from nearly 9,910 auto insurance policyholders. The study was fielded in January and February 2014.

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