Where do customer reviews and industry trends intersect?
We took a look at 2020's car insurance reviews and talked to industry experts to learn more. We'll focus on how the largest patterns in customer reviews relate to trends identified by experts.
Here's what reviews reveal about the auto insurance industry in 2020:
Car insurers do well with the following:
Although these numbers show high levels of success, reviews also revealed some complaints:
These complaints occur less frequently than praise for these items, which is a good sign for the industry as a whole.
Customer service is a key component of the customer experience, and it's a good sign that reviews reveal such a high level of satisfaction with customer service.
From 2020's reviews, auto insurers do well with customer service. Reviewers mention honesty and reliability. They appreciated getting help from knowledgeable and proactive agents.
The reviewers with a poor customer service experience mentioned poor communication and uncaring agents.
Auto insurers can build on this strength by continuing to train their insurance agents and customer service representatives well.
Marc Fredman, CCC Information Services Senior Vice President, notes that auto insurers have the difficulty of delivering continuity for policyholders while engaging with them infrequently. Technology can help insurers meet this challenge.
"We predict digital communications that connect policyholders and carriers in real-time conversations will become table stakes, and this same technology will begin to unify parties that need to work together to resolve claims, including collision repairers and auto lenders," says Fredman.
Technology's role in customer service will increase. While this can help make the customer experience consistent, it also runs the risk of removing the human interaction that many of 2020's reviewers praised.
Good pricing attracts and retains customers. Auto insurance is a necessity for car owners, so finding good coverage at a good price matters.
A higher percentage of reviewers had positive things to say about cost, mentioning things like affordability, good discounts, low premiums.
A lower percentage of reviews did not have a good experience with cost. These reviewers mentioned increased rates and high pricing for the coverage offered.
Although auto insurers seem to balance cost and coverage well for policyholders, more often than not, they can do more in this area — whether it's making the cost and coverage tradeoffs clearer for clients or innovating in pricing models.
COVID-19 drastically changed driving habits, generally reducing driving time and traffic. This change in habits has affected insurance rates.
Duncan France, State Farm Insurance Agent, predicts: "Rates will likely remain low for the foreseeable future. Fewer people are driving nationwide, and the work from home trend is here to stay. Eventually I think people will rotate back in and out of the office, but the morning commute and rush hour seem to be a thing of the past!"
Lower driving levels has also made Usage-Based Insurance (UBI) more attractive to consumers.
"There will be an increase in policies that measure how many miles you drive. This is a rising trend due to the Work-From-Home phenomenon. If you drive 100 miles round trip to work, you will pay more than the WFH person who has zero miles to work (and consequently zero chances of getting in a wreck)," says Mark Anderson, Texas personal injury lawyer.
Rates customized based on how you drive and how much you drive can help safe and infrequent drivers save money on their policies. These offerings make it easier for auto insurers to balance cost and coverage for their policyholders.
Policyholders buy insurance policies to be able to protect their finances with the ability to make claims. With this trust, policyholders anticipate that their insurer will help them when needed.
In 2020, more reviewers had a positive experience with filing claims than reviewers with poor experiences. These reviewers appreciated quick processing, good communication, and felt their claim had been resolved fairly.
Reviewers with negative experiences mentioned claims denials, poor communication, and other complications in the claims process.
Increased use and reliance on technology has been a rising trend throughout many industries, and the pandemic only increased it. Auto insurance is no exception.
"Consumers should be prepared for a greater digital experience during the claims process. From notifying their company about an accident to receiving payment, most companies have adopted some form of digital experience into their claims process. The pandemic has forced the industry to reduce our dependence on face-to-face interactions resulting in companies expediting their digital claim strategy," anticipates Charlie Wendland, Branch Insurance Head of Claims.
Tech-enabled claims can keep processing efficient and automate communication, which could help insurers capitalize on praise found in 2020's customer reviews.
Coverage is another important element of car insurance, and it goes hand-in-hand with claims. Reviewers didn't have very much to say about coverage.
Coverage was described frequently as "good" or "great." Some reviewers with positive perceptions of coverage had been with their insurer for many years. Those with negative comments on coverage were few. These reviewers usually felt that the coverage was low for the price.
With coverage occuring in reviews at such low percentages, it's hard to draw conclusions on what car insurers do well and what they can do to improve.
Many auto insurers responded to the COVID-19 crisis and the shift to more remote work by returning part of car insurance premiums to policyholders. Four percent of reviewers mentioned the COVID-19 response of their auto insurer. These mentions were largely positive.
Long-term effects of the pandemic's crises on the auto insurance have yet to be seen. However, short-term effects will be evident as we continue to confront the pandemic.
Anderson, identifies one important trend drivers should be aware of:
"There will be more uninsured motorists on the road. As unemployment rises (or remains the same, a relatively high number in 2021 due to pandemic related layoffs), then the number of uninsured motorists also rises.
In the DFW metroplex, for example, recent reports show that up to 25 percent of the vehicles do not carry the state mandated insurance. That number will likely increase as the unemployed must prioritize how they spend their money and auto insurance falls to the back of the line. So we recommend to all our clients and family to always carry uninsured motorists coverage. It is relatively inexpensive and can provide the needed protection if the person who causes a wreck has no insurance.”
The qualitative analysis is based on a random sample of 227 reviews from a total of 1,329 reviews left for car insurance companies on BestCompany.com. Before publication, reviews must pass our verification process that helps ensure that reviews are from real people.
AAA reviews are primarily about AAA's roadside assistance services. These reviews were omitted from the random sample to prevent the qualitative analysis from being skewed.