Anyone comparing results of the J.D. Power 2024 U.S. Auto Insurance Study with prior editions, like the one in 2023, will notice that scores dropped by nearly 200 points—to an average of about 646 in 2024 from 822 in 2023.

J.D. Power made several changes in 2024, Breanne Armstrong, director of global insurance intelligence at J.D. Power, explained during a webinar last week, “The Evolution of Auto Insurance Customer Satisfaction.”

According to Armstrong, J.D. Power simplified the survey so that respondents can complete a collection of core questions, relating to seven dimensions of customer relationships, more easily.

Importantly, starting in 2024, survey takers are offered six choices to grade auto insurers in responding to questions: poor, just OK, good, great, excellent or perfect.

Previously, J.D. Power used a 10-point scale, and responses tended to lean toward the positive end of the spectrum without much differentiation, Armstrong reported on the webinar. The poor-to-perfect scale proved to be the most reliable, revealing the most discrimination on J.D. Power’s tests of different types of scales. “Even though the six-point scale then gets basically converted to a 10-point scale, the scores are going to look lower” starting in 2024, she said. “Now, in order to select ‘perfect,’ it really has to be a truly exceptional experience—and we don’t have nearly as many respondents selecting that top bucket,” she explained. As a result, index scores look lower.

The model for the satisfaction scores has changed in another way, she said, at one point noting that a move to gauge insurer performance on several customer experience dimensions rather than insurance-specific transactions allows the insurance industry satisfaction studies to be compared to other industries. Dimensions like “level of trust” and “ease of doing business” are common aspects of experience that all surveys now delve into, she said, showing that the auto insurance overall score of 646 now ranks well below industries like mortgage origination and direct banking, which come in over 700.

For auto insurance, the prior model centered on five transactional factors: non-claims interaction, price, policy offerings, billing process and policy information, and claims. Departing from the factor-attribute model in 2024, the new holistic approach focuses on these seven dimensions of customer experience: level of trust, price for coverage, people, ease of doing business, product/coverage offerings, problem resolution, and digital channels.

During the webinar, Armstrong drilled down on regional score variations for each of the dimensions and also offered insights on which of the legacy attributes that fed the prior model have the biggest impact on dimensions in the new model. For example, for the trust dimension, price—”unsurprisingly”—is impactful. But also impacting trust are things like courtesy extended to customers when they are assisted online or by agents, and also knowledge of insurance agents, she said.

For each dimension, Armstrong also spoke about the key performance indicators having the most impact on scores. As an example, she noted that for customers that had call center experience, trust plummets if an insurer’s customer service rep doesn’t have the customer’s information ready.

Another performance misstep likely to push down customer trust was a failure to provide an accurate time frame for the resolution of a claim. Leaving customers in the dark about what their policies cover or why the prices of their policies went up also drive down trust scores, she said.

When Armstrong detailed KPIs impacting other dimensions, some of the same ones popped up. Ensuring that a CSR has customer information readily available, for example, has an impact on the scores for ease of doing business and product/coverage dimensions.

According to Armstrong, ensuring that customers understand what their policies cover is the top KPI and impacts all dimensions analyzed by J.D. Power.

At one point during the webinar, Armstrong displayed a map showing trust scores by region and corresponding levels of rate changes. Florida, the region with the lowest trust score, also had the most respondents reporting insurer-initiated price increases.

Managing expectations is key, she suggested, going on to show trust score variances for different levels of customer expectation. Customers who expected and understood why they were getting rate hikes scored their levels of trust at 736—on par with customers who saw their premiums actually decline.

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Interested in knowing which U.S. auto insurers customers judged to be leaders and laggards?

Read the article, “GEICO Tops Progressive With Higher J.D. Power Scores,” for information on how individual insurers scored on overall auto insurance satisfaction and on usage-based insurance satisfaction.