Insurance Customer Experience Linked to Stellar Financial Results
Oct. 2, 2018
J.D. Power’s cross-industry research demonstrates that insurance companies that deliver the best customer experience also achieve the greatest financial performance.
October 2, 2018—A 2017-2018 research study being conducted by St. John’s University using J.D. Power data and insurance statutory data has identified significant links between customer satisfaction and profitability across the U.S. auto insurance industry.
The study examined customer satisfaction and combined ratios for U.S. auto insurers between 2001 and 2015 using multivariate linear regression analysis, according to the report. According to a report by the Insurance Journal, the initial findings concluded:
Companies that deliver the best customer experience also deliver the greatest financial performance
Great customer satisfaction is associated with a lower combined ratio
There is a significant relationship between customer satisfaction and the expense ratio but not the loss ratio
Customer acquisition costs are lower for insurers with high satisfaction, meaning lower underwriting and staffing expenses
J.D. Power also found a strong correlation between customer tracking programs, such as OSAT or NPS and increased retention. In a recent analysis, the study found a close link between household retention and customer satisfaction as reported through tracking programs.
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