Insights: Why Auto Insurance Customer Satisfaction Has Dropped

The American Customer Satisfaction Index (ACSI) – an independent benchmark based on annual surveys – says satisfaction is down 3 percent in property and casualty insurance. Website CustomerRespect.com reports that GEICO and Progressive took the hardest hit among individual carriers.

Why the recent drop in customer satisfaction? A recent Market Insight Group report, sponsored by Applied Systems, provides some clues about the customer expectation disconnect. The report looks at what’s essential to customer experience, now that we live in an online digital mobile society. It’s founded on the idea that customer interaction today isn’t what it used to be.

Property Casualty 360 summarizes the report findings as follows: Over the past 20 years or so, the channels of engagement have evolved in four distinct phases.

1. To imagine phase one, think back to when communication happened exclusively via phone, fax and the postal system, if it wasn’t happening face-to-face.
2. Phase two introduced email and instant-messaging to that picture.
3. Phase three ushered in social media, online content and mobile apps.
4. In phase four, we look forward to an era of web-connected vehicles and wearable devices.

While phase four is still just emerging, it’s important to note that phase three “is rapidly becoming the ‘new normal’ of online digital communication,” according to the firm’s assessment.

Yet – counterintuitively – the report suggests that customers still expect to interact with their insurers primarily face-to-face or through email.

In other words, customers don’t expect their insurance providers to offer the level of experience they’ve grown to rely on in every other customer interaction they engage in. That is not a recipe for satisfaction.

Customer retention for the win

Bottom line, insurers need to build mobile apps, social media and other digital channels into their customer engagement efforts – and they need to do it fast. As we’ve said before, it boils down to customer experience. How can insurers be more accessible and deliver more value through relevant and frequent interactions?

Usage based insurance provides a channel to raise the customer experience bar on multiple counts. By leveraging mobile apps to deliver services via policyholder smartphones, insurers gain a way to continually reach out, seek feedback and make recommendations – following the example of giants like Amazon who’ve made themselves a model of successful customer engagement.

Want to know more about smartphone UBI?  Download our complimentary report, “10 Reasons to UNPLUG and Unburden UBI.”