Auto Insurance Customer Satisfaction Declines Amid Rising Rates: J.D. Power Study

Auto insurance customer satisfaction has declined to 644 on a 1,000-point scale, with 38% of customers not very satisfied. Insurers need to focus on delivering a seamless customer experience across all channels to improve retention rates, especially for high-value customers who pay higher premiums and have multiple plans. Customer retention is not solely driven by cost, but also by good service and positive claim experiences.

Auto insurance companies have seen a significant decline in customer satisfaction, according to the latest J.D. Power 2025 U.S. Auto Insurance Study. The study reveals that 38% of customers are not very satisfied with their insurance providers, with overall satisfaction dropping two points to 644 out of 1,000 [1].

The decrease in customer satisfaction comes at a time when auto insurers are regaining profitability. Average monthly premiums have increased by more than half since 2019, contributing to improved loss ratios and profitability for insurers [1]. However, the study suggests that insurers must focus on delivering a seamless customer experience to retain high-value customers.

High-value customers, who pay higher premiums and have multiple plans, are particularly likely to shop around for better providers. Only 51% of these customers plan to renew their policies with their current insurer, compared to 53% of medium-value customers and 54% of low-value customers [1].

Customer retention is not solely about cost; it is also about service and positive claim experiences. The study highlights that a seamless experience across channels, including mobile apps, phone interactions, and in-person visits, is the primary driver of customer retention [1].

SunCar Technology Group Inc., a leading cloud-based auto insurance provider in China, has been focusing on innovation to enhance customer satisfaction. The company's partnership with Xiaomi, which entered a new phase to support the Xiaomi YU7 launch, aims to promote fully intelligent auto insurance [2][3]. SunCar's use of AI and big data analysis to tailor intelligent vehicle insurance solutions demonstrates its commitment to improving customer experience.

In conclusion, while auto insurers are recovering from financial instability, they must prioritize customer satisfaction to retain high-value customers. The focus on delivering a seamless experience across all channels will be crucial for insurers to maintain their profitability and growth.

References:
[1] https://www.automotivedive.com/news/auto-insurance-satisfaction-survey-jd-power/751916/
[2] https://www.morningstar.com/news/pr-newswire/20250630cn20886/suncars-partnership-with-xiaomi-enters-a-new-phase-to-support-its-yu7-launch-promoting-fully-intelligent-auto-insurance
[3] https://emobilityplus.com/2025/06/30/suncar-and-xiaomi-accelerate-auto-insurance-innovation/