Press Release December 2013 and National ACSI Q3 2013
Customer Satisfaction with Banks Returns to Pre-Recession Level;
Health Insurance Improves as Affordable Care Act Kicks In
Big Gains for Bank of America, Citigroup, and WellPoint; Farmers Group and Progressive Drop
National Customer Satisfaction Reaches New High, Aided by Improvements Across Financial Sector
ANN ARBOR, Mich. (December 10, 2013) – Rising satisfaction with financial services—including banks, credit unions, health insurance, property and casualty insurance, and life insurance—pushes the national level of customer satisfaction to a new high in the third quarter of 2013, just ahead of the stock market’s record high. According to a report released today by the American Customer Satisfaction Index (ACSI), the index is up 0.3% to 76.7 on a 0-100 scale, and overall customer satisfaction with retail banking is back to its pre-recession level. Despite rising bank fees, customer satisfaction for banks grew by 1.3% over the past year to an ACSI benchmark of 78.
“Even though banks have raised fees again, the 15th straight year of such increases, no negative repercussions have been detected regarding customer satisfaction,” says Claes Fornell, ACSI founder and chairman. “In part, this is because a fair number of consumers are changing their behavior to avoid the fees by exclusively using their own bank’s ATMs and maintaining sufficiently large account balances.”
All of the big banks improve, but smaller banks (+5% to 83) and credit unions (+4% to 85) far outdistance their larger competitors. Among the largest four banks, JPMorgan Chase maintains the lead with a 3% gain to 76, while Citigroup jumps 6% to 74, and Wells Fargo edges up 1% to 72. Bank of America registers its largest improvement in a decade (+5% to 69) but remains in last place, and is the only bank that has yet to restore its pre-recession level of customer satisfaction.
Banks and credit unions receive good marks for their customer service at branches and for online banking. On the other hand, customers give a failing grade to the competitiveness of bank interest rates, while credit union customers find the lack of convenient ATMs and branches to be the most troublesome aspect of the experience.
Customer satisfaction with health insurance is up 1.4% to an ACSI benchmark of 73. High premiums, out of pocket expenses, and complicated policies contribute to relatively low satisfaction compared to other financial services. However, health insurance premiums are increasing at the lowest rate in years.
“The health insurance industry is in a state of flux as many parts of the Affordable Care Act come into effect, including insurance exchanges, which allow consumers to comparison shop for health care coverage,” says David VanAmburg, ACSI Director. “The customer satisfaction gains this year may be driven in part by expected price competition as health insurance companies anticipate the effects of the new online marketplace.”
In addition to the possibility of increased price competition, there is an opportunity for health insurers to distinguish themselves by competing on customer satisfaction. Currently, there is little differentiation, with most companies clustered around the industry average. The Blue Cross and Blue Shield Association leads with an ACSI score of 74, while WellPoint (+4%) matches the industry average (73). The aggregate of smaller insurers such as Cigna and Humana remains just below average (+1% to 72). UnitedHealth is stable at 70, while Aetna is at the bottom at 69 despite a 3% gain.
Customers rate most aspects of the health insurance experience rather poor. While most policies do provide reasonably good access to hospitals and primary and specialty care doctors, coverage of services, particularly prescription drugs, could be better. Billings are not very easy to understand and industry-wide both insurance websites and call centers receive low marks from users.
Customer satisfaction improves for both life and property and casualty insurance. Life insurance is up for the second year in a row (+2.5% to 83). Despite annual rate increases, customer satisfaction with property and casualty insurance is also on the rise, up 3.8% to 81. Customers are more satisfied with auto insurance (79) than homeowners insurance (76), although customers with multiple policies from the same insurer have the highest level of satisfaction (80).
The increase in customer satisfaction for property and casualty is the result of large gains for smaller insurance carriers, a group that includes AAA and Nationwide (+8% to 83). Among the largest property and casualty insurers, GEICO is the only company to improve (+3% to 81), taking the top spot and supplanting State Farm (-2% to 79) and Progressive (-4% to 78). Allstate (-3% to 77) and Farmers (-4% to 76) follow closely behind.
Smaller life insurance companies also tend to have higher customer satisfaction. Smaller firms, which include John Hancock and Lincoln Financial, continue to lead (up 2% to an 83 aggregate score). Among the large companies, New York Life is at the top, unchanged at 80 for a third year in a row. The remaining life insurers group together a bit below, with Northwestern Mutual (-1%) and Prudential (-1%) tied at 78 and MetLife (-1%) at 77.
Policy holders of property and life insurance give firms high marks for their customer service and the variety of coverage options offered, but they find the availability of meaningful policy discounts and rewards lacking.