Canadian Auto Insurance Policyholders are More Satisfied with Carriers

Lubo Li

Customer satisfaction with Canadian auto insurance companies improves this year in each of the three geographic regions evaluated, mainly due to fewer premium increases in addition to higher satisfaction with policy offerings, according to results in our 2012 Canadian Auto Insurance Study. This year’s study is based on responses from 11,620 auto insurance policyholders. Some findings from each of the regions are highlighted below:

Quebec Region

Satisfaction in the Quebec region increases by 17 points (based on a 1,000-point scale), which is the largest increase in score among all three regions from 2011. Satisfaction increases significantly in two of the five factors* that make up the overall customer satisfaction index: billing and payment (+21 points) and price (+19 points). In addition, only 11% of customers in the Quebec region say they experienced an insurer-initiated rate hike—the lowest percentage in all three regions.

La Capitale ranks highest in customer satisfaction among Quebec’s auto insurance companies with a score of 850 (on a 1,000-point scale). In fact, La Capitale receives the highest index score among carriers in all three regions this year.

Ontario/Atlantic Region

The next-largest increase in overall satisfaction is in the Ontario/Atlantic region, where the overall customer satisfaction index rises by 11 points from 2011, primarily due to higher satisfaction with insurer policy offerings (+17 points). Satisfaction with policy offering is most often influenced by the quality of discounts offered, according to the study. Nearly two-thirds (60%) of customers in this region received multiple (three or more) discounts on their policy, up 6 percentage points from 2011. Also, only 29% of customers experienced an insurer-initiated rate increase in 2012, down 4 points from a year ago.

In this region, Grey Power ranks highest with a score of 786.

Western Region

The Western region has the smallest increase from last year—up 5 points. This may be due to a higher number of insurer-initiated premium increases. One-fourth of customers in the Western region saw an insurer-initiated increase in 2012, vs. only 18% in 2011. The Western region, made up of British Columbia, Alberta, Saskatchewan, and Manitoba, is the only region with a higher number of premium increases in comparison to 2011.

In the regional rankings, Canadian Direct Insurance earns the highest score of 806 in customer satisfaction among auto insurance companies for a second consecutive year.

What about Satisfaction among Younger Policyholders?

While satisfaction improves across all regions, we see that the gains are not as strong among Generation Y customers as among Baby Boomers. As might be expected, Gen Y customers are notably less satisfied (737) than are Baby Boomers (770). These younger consumers are more critical of their insurer when service expectations are not met.

In addition, there are appreciable differences in scores among Gen Y customers regarding interactions with their insurer, particularly through the insurer’s call center or local agent/brokers. Among Gen Y customers, satisfaction with both of these interaction channels is nearly 50 points lower than compared with Baby Boomers. For a detailed description of the differences between these two demographic groups and some practices on how insurers can better meet the needs of these customer groups, please click on the Management Discussion.Lubo Li, senior director and practice leader of Canadian financial services and insurance at J.D. Power and Associates, Toronto

*Customer satisfaction is measured across five factors: interaction; price; policy offerings; billing and payment; and claims.

For more detailed rankings, please click on the press release.

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