Lemonade took the No. 1 spot for the renters insurance segment in the J.D. Power 2020 U.S. Home Insurance Study, marking the first time an InsurTech brand has ranked highest in one of J.D. Power’s insurance studies. Lemonade earned a score of 866 (on a 1,000-point scale), with Erie Insurance (865) and Allstate (841) rounding out the top three.
On the homeowners side, COUNTRY Financial ranked highest with a score of 855, followed by Amica Mutual (853) and Auto-Owners Insurance (843).
The U.S. Home Insurance Study examines overall customer satisfaction in the homeowners and renters line based on five factors: interaction, policy offerings, price, billing process and policy information, and claims. The study is based on responses from 11,942 homeowners and renters via online interviews conducted in June-July 2020.
Among the study’s other findings:
- Customer experience is key to lifetime value, and 67 percent of homeowners insurance customers who’ve selected a brand based on good service experience say they “definitely will” renew with that insurer. Reputation (64 percent) and convenience (64 percent) follow as top drivers of intent to renew. Price as a reason for initial insurer selection is one of the lowest-ranked motivators driving homeowners customer retention.
- However, the study found that renters are more focused on price, with 52 percent of renters insurance customers choosing that as the primary reason for selecting an insurance provider.
- Nearly two-thirds (63 percent) of millennial homeowners have smart home products, and this age group is more than twice as likely as boomers to use insurer-provided tools to inventory their possessions. Customers who use these tools say they have a significantly higher level of engagement with their insurer, creating additional opportunities to add value through good customer service.
“Homeowners insurance customers are the single-most-valuable group of personal lines customers for P&C insurers,” said Robert M. Lajdziak, senior consultant of insurance intelligence at J.D. Power. “They have a significantly higher bundling rate, 38 percent higher product penetration beyond home and auto, and their tenure is twice the length of a monoline auto customer. The potential ‘lifetime customer value’ of homeowners makes meeting their needs and motivations to renew a critical task for the industry.”
Source: J.D. Power