Auto insurance industry has returned billions of dollars to consumers in the wake of the COVID-19 pandemic. By mid-April, auto insurers had returned more than $10 billion. As the pandemic continued, insurers introduced further rate reductions or extensions to their premium relief offers, bringing the customer refund total to about $18 billion. Despite billions of dollars in refunds, customer satisfaction actually dropped during the pandemic period.
Around 56% satisfaction level, customer retention typically drops as customers increasingly turn to insurance comparison shopping for lower rates and new carriers. They also suggested that the decline could be due to the lack of auto insurance’s relevance as government-mandated lockdowns limited traffic activity. The experts also noted that many auto insurance customers never received any word from their insurers about any COVID-19-related insurance rebates.
Customers with higher insurance-risk profiles, are also more likely to have had their employment impacted. Those customers are also likely to be using premium deferral programs. These factors, along with a lower-than-usual satisfaction rate, could easily lead to customers switching their insurer for another.