Despite a significant increase in weather-related insurance claims in Canada, customer satisfaction with their insurance provider—even among those who file a claim—is improving, according to the J.D. Power 2014 Canadian Home Insurance StudySM released today.
The annual study examines customer satisfaction with their homeowners insurer by examining five factors: interaction; price; policy offerings; billing and payment; and claims.
Year over year, the number of weather-related claims has increased by 32 per cent; yet, overall customer satisfaction has improved nationally to 770 (on a 1,000-point scale) from 761 in 2013. Satisfaction improves by 17 points in the Atlantic/Ontario region to 771 and by 11 points in the Western region to 752, while satisfaction declines by 13 points in the Quebec region to 794.
“While it may seem contradictory that satisfaction increases when a homeowner files a claim, the claims process is when customers actually see the value of the premiums they have been paying,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power. “Insurance is a product customers hope they never have to use, but when they do have to, that’s the opportunity for the insurance provider to make good on their promise.”
Two out of five (41 per cent) of the home insurance claims were for weather-related damage. Among customers who filed a weather-related claim, satisfaction with the claims process averages 790, up from 764 in 2013 when 31 per cent of claims were for storm damage. Claims satisfaction among customers whose homes suffered non-weather-related water damage—the second most common type of claim (21 per cent)—averages 808.
While the national average claims satisfaction score is trending upward, regional patterns vary. The Western region has the largest portion of weather-related claims (45 per cent) and, despite a 35-point improvement from 2013, the lowest claims satisfaction at 773. The Atlantic/Ontario region has the greatest increase in weather-related damage—up 35 per cent from 2013—while the average claims satisfaction score in the region has improved by 65 points to 817. Non-weather-related water damage is nearly as common as weather-related damage in the Quebec region (26 per cent vs. 32 per cent, respectively), where overall claims satisfaction scores average 787, down by 4 points from 2013.
A larger proportion of customers in 2014 indicate their insurer fully covered everything they thought should be covered, compared with 2013 (87 per cent vs. 82 per cent, respectively), which significantly increases claims satisfaction by more than 200 points on a national level.
The Personal (807) ranks highest in the Atlantic/Ontario region. Allstate, Co-operators and State Farm rank second in a three-way tie at 791.
SSQ General (805) ranks highest in the Quebec region, closely followed by La Capitale (804) and The Personal (803).
BCAA ranks highest in the Western region for a third consecutive year, with a score of 819. Following BCAA in the rankings are Portage Mutual Insurance (774) and Wawanesa (770).
- Contributing to the year-over-year improvement in overall satisfaction on a national level is a 10-point increase in the price index, the third most important driver of customer satisfaction. Despite the improvement, price continues to be the lowest-scoring factor in the customer experience, due in part to sustained premium increases in the industry, with 45 per cent of customers indicating they have received a premium increase in 2014.
- Among customers who receive a premium increase, overall satisfaction is significantly higher when they receive an explanation of the increase than when they do not receive an explanation (751 vs. 703, respectively).
- When presented with a list of perils included under their homeowners policy, 24 per cent of customers indicate they don’t know which perils are included under their policy. Additionally, 21 per cent of customers believe their home is covered for overland flooding—a peril that is not covered under a homeowners policy in Canada.
The 2014 Canadian Home Insurance Study is based on responses from 7,092 home insurance customers. The survey data was collected from March 2014 through April 2014.
Overall Customer Satisfaction Index Scores
JDPower.com Power Circle RatingsTM
(Based on a 1,000-point scale)
|CAA Insurance Company||782||4|
|Dominion of Canada||782||4|
|Desjardins General Insurance||718||2|
Note: Included in this study, but not ranked due to low sample size, are Chubb, Northbridge Insurance and Portage Mutual Insurance.
|Desjardins General Insurance||793||3|
Note: Included in this study, but not ranked due to low sample size, is L’Union Canadienne.
|Portage Mutual Insurance||774||4|
|Alberta Motor Association||756||3|
|Dominion of Canada||752||3|
Note: Included in this study, but not ranked due to low sample size, are Gore Mutual, Economical Insurance, RSA and State Farm.
Power Circle Ratings Legend
5 – Among the best
4 – Better than most
3 – About average
2 – The rest
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