Auto Insurance Profitability Rising Amid Customer Satisfaction Challenges
The U.S. auto insurance market has seen significant premium increases, with average monthly rates rising over 50% since 2019. These rate hikes, alongside improving loss ratios, have enabled auto insurers to regain profitability after years of industry volatility. Some insurers have even begun filing for rate decreases, signaling a shift from crisis management to strategic growth and risk management.
Despite improved profitability, customer satisfaction with auto insurers has declined, with 38% of policyholders expressing dissatisfaction and a 2-point drop in overall satisfaction year-over-year to 644 on a 1,000-point scale. This marks a considerable decline from the record high satisfaction score of 831 in 2019. The growing dissatisfaction could prompt increased customer shopping for alternative insurance providers.
According to the J.D. Power 2025 U.S. Auto Insurance Study, high-value customers—those with multiple policies, long tenure, and higher premiums—are more inclined to consider switching insurers, with only 51% stating they definitely will renew. Medium- and low-value customers show slightly higher renewal intentions. This underscores the necessity for insurers to prioritize customer retention beyond pricing.
Customer retention drivers extend beyond competitive premiums, with service quality and positive claims experiences playing crucial roles. The study highlights that delivering a seamless, omnichannel customer experience across digital platforms, call centers, and in-person interactions is key to enhancing satisfaction and loyalty. Trust in the insurer, ease of business, and effective problem resolution also significantly influence customer perceptions.
The study surveyed over 48,000 auto insurance consumers across 11 U.S. regions between May 2024 and April 2025. It also evaluated satisfaction among policyholders with usage-based insurance programs, which tailor premiums based on driving behavior. These insights offer insurers data-driven guidance to refine strategies focused on customer experience, retention, and growth in a competitive insurance landscape.