1. 2006 National Auto Insurance StudySM
Presented to:
St. Paul Travelers
November 1, 2006

2. Today’s Program Presenters
Jeff Leiman
Senior Research Director, Insurance Practice
Chip Lackey
Senior Account Director, Insurance Practice
Agenda
Overview and Key Findings
Financial Value of Satisfaction
Overall Satisfaction Performance
Satisfaction vs. Key Competitors
Detailed Findings
Closing Remarks and Recommendations

3. J.D. Power and Associates - Introduction
35+ years of measuring customer attitudes, behaviors, perceptions, needs….
Recognized as having transformed industries through measuring and reporting customer satisfaction
Industries we serve have requested that we bring the pieces together into a comprehensive, unified and actionable plan
Gary

4. The Customer Experience Model
The 5 P’s of the
customer experience
People
Presentation
Price
Product
Process
Gary
First we must understand that each company creates a unique customer experience through a set of five inter-related aspects of their business systems (business and operational models)

5. Index Framework

6. Customer Satisfaction Varies by Industry
Experiences from one
Industry influence
customer expectations
for other industries
Gary

7. Key Findings

8. Key Findings
Travelers ranks 12th in customer satisfaction with an overall CSI score of 790, ten points below the industry average.
Within its competitive set, Travelers outperforms Progressive and is comparable to Allstate, The Hartford, and Safeco. It trails both GEICO and State Farm in satisfaction by a significant margin.
However, Travelers is among four insurers—three of whom utilize Independent agents—who enjoy an improved satisfaction level compared to 2005.
Satisfaction with the Interaction experience has grown significantly for Travelers since 2004, moving from a competitive weakness to average performance in The improved performance of its independent agents drives most of this increase.
Compared to its key competitors, Travelers is relatively weak on three of the five factors that comprise the customer experience:
Billing and Payment – Statements need more clarity, many customers confused
Claims – Due to lack of agent involvement and slower than average servicing
Policy offerings - Poor scores for variety of coverage options and available discounts

9. Financial Value of Customer Satisfaction

10. Overall CSI vs. Likelihood to Renew

11. Auto Insurance Customer Satisfaction Financial Measures
High satisfaction carriers enjoy an advantage across all of these measurements.

12. Overall Satisfaction Performance

13. Customer Satisfaction Index Models

14. Customer Satisfaction Index Model - Combined

15. Overall Customer Satisfaction Index (CSI) Ranking
Difference
from 2005
‡ USAA is not ranked because it is not generally open for the public to purchase.
Significantly better than 2005 at a 90% confidence interval, based on nationally weighted data.
Significantly worse than 2005 at a 90% confidence interval, based on nationally weighted data.

16. Overall CSI Index Trend
Improved satisfaction in 2006, though Travelers trails competitors
Key Competitors: GEICO, Progressive, SafeCo, Hartford, State Farm, Allstate.

17. Satisfaction Performance vs. Key Competitors

18. St. Paul Travelers vs. Industry
Gap Point Analysis

19. St. Paul Travelers vs. GEICO
Gap Point Analysis

20. St. Paul Travelers vs. Progressive
Gap Point Analysis

21. St. Paul Travelers vs. State Farm
Gap Point Analysis

22. St. Paul Travelers vs. SafeCo
Gap Point Analysis

23. St. Paul Travelers vs. The Hartford
Gap Point Analysis

24. St. Paul Travelers vs. Allstate
Gap Point Analysis

25. Key Performance Indicators for setting Improvement Targets

26. Example: Issue Resolution KPI
Example: Issue Resolution KPI** Performance - Number of Contacts to Resolve Issue
Breakpoint
% of Customers Contacting Insurer
Overall Interaction Index
**Key Performance Indicator
# of Contacts Made to Insurer

27. Key Performance Indicators Focusing on these issues should improve satisfaction
The study identified the following Key Performance Indicators that lead to a more satisfying consumer experience:
Bundle auto insurance coverage with a other products
Offer policy discounts
If a premium increases, notify the customer prior to the bill and discuss coverage options
Minimize billing related contacts of any type
Encourage online or automatic payments
Adopt an “once and done” mindset that empowers agents and representatives to handle customer questions/problems on one call. If a customer requires a re-contact, strive for same day resolution
Offer customers a policy review on an annual basis
For claims interaction, respond to the FNOL within one day and include the agent in the process.
For the claims settlement, settle vehicle damage claims within two weeks and provide claimants with a detailed settlement explanation.

28. Key Performance Indicator Forecasting Tool

29. Improvement Monitoring Tool
Web-based reporting of key metrics over time to the field

30. Policy Offering

31. Policy Offerings Index Trend
Though improving, still a competitive weakness for Travelers
Key Competitors: GEICO, Progressive, SafeCo, Hartford, State Farm, Allstate.

32. Discounts Rating (Industry)
Discounts Received
Discounts yield higher satisfaction levels
7.75
6.76
5.67
Competitiveness of
Discounts Rating (Industry)
Breakpoint

33. Policy Offerings Index
Bundling and Customer Satisfaction
Travelers customers bundle…but impact on satisfaction minimal
Breakpoint
% of Total Customers
Policy Offerings Index

34. Products Purchased From Current Insurer
Industry Overall
Penetration
Industry Average 785 3% 4%
13%
14%
18% 8%
12% 7% 5%
64%
23%

35. Policy Offering Attributes

36. Price

37. Price Index Trend Travelers improved, comparable to competitors
Key Competitors: GEICO, Progressive, SafeCo, Hartford, State Farm, Allstate.

38. Price Sensitivity by Insurer
Travelers price sensitivity comparable to Direct competitors
Note: Values may not total 100% due to rounding.

39. Influence of Price on Purchase Decision
Direct competitors most price focused…Agent least
Note: Values may not total 100% due to rounding.

40. Premium Change and Discussion KPI** Performance
Breakpoint
% of Total Customers
Index Scores
Premium Change in the Last 12 Mths
**Key Performance Indicator

41. Billing and Payment

42. Billing and Payment Index Trend
Travelers trails competitors
Key Competitors: GEICO, Progressive, SafeCo, Hartford, State Farm, Allstate.

43. Customer Satisfaction with Billing Contacts Industry Overall
Index Score
% Of Total
Customers
87% 9% 3% 1%

44. Drivers of Satisfaction for Billing Contacts Industry Overall
Attribute Rating
Note: Base equals total customers.

45. Incidence of Billing Contacts

46. Customer Satisfaction with the Method of Payment
% Using Payment Method
Billing Index Score
Note: The incidence of “payroll deduction” is less than 1% and is not shown.
Values may not total 100% due to rounding.

47. Billing and Payment Attributes

48. Interaction

49. Interaction Index Trend
Travelers and other IA insurers improve in 2006
Key Competitors: GEICO, Progressive, SafeCo, Hartford, State Farm, Allstate.

50. Interaction Methods – By Distribution Channel

51. Method of Contact and Satisfaction- Agent Distribution Industry Overall
% Using Interaction Method
Overall Interaction Index

52. Method of Contact and Satisfaction- Direct Distribution Industry Overall
% Using Interaction Method
Overall Interaction Index

53. Customer Satisfaction by Agent Type Industry Overall

54. Interaction Index Weights by Distribution Channel Industry Overall

55. Problem Mitigation KPI
Problem Mitigation KPI** Nature of Most Recent Non-Claim Related Interaction
% of Customers Contacting Insurer
Overall Interaction Index
**Key Performance Indicator

56. Reason for Contacting and Impact on Satisfaction
Industry Overall
Overall
Interaction Index
All Contacts
839
837
848
791
823
798
845
821
Reason for Most Recent Contact

57. Type of Questions or Problems Experienced Travelers customers have similar questions/concerns
Index Score
Industry
Interaction
Index
791
823
836
843

58. Problem Contacts and Impact on Satisfaction
Industry Overall
Overall
Interaction Index
Problems
676*
712
766
739
705* #
675*
685*
Reason for Most Recent Contact
*Caution: small sample size
# Insufficient sample size

59. Issue Resolution KPI** Performance Number of Contacts to Resolve Issue
Breakpoint
% of Customers Contacting Insurer
Overall Interaction Index
**Key Performance Indicator
# of Contacts Made to Insurer

60. Issue Resolution KPI** Performance Time to Resolve
Breakpoint
% of Customers Contacting Insurer
Overall Interaction Index
**Key Performance Indicator
# of Days to Resolve Issue

61. Issue Resolution KPI** Performance Call Back Fulfillment
Breakpoint
% of Customers Contacting Insurer
Overall Interaction Index
**Key Performance Indicator

62. Overall Interaction Index
Recency of Last Contact and the Impact on Satisfaction with Interaction
% Contacting Insurer
Overall Interaction Index
N/A
Timeframe of Last Contact

63. KPI** Performance Policy Review
Breakpoint
% of Total Respondents
Index Scores
**Key Performance Indicator

64. Claims

65. Claims Index Trend
The claims process continues to be a competitive weakness
Key Competitors: GEICO, Progressive, SafeCo, Hartford, State Farm, Allstate.

66. Most Recent Claim Filed With St. Paul Travelers
Within Last 12 Months
13-36 Months Ago
805
808
Industry
Overall CSI
Index Scores
More Than 36 Months Ago
826
Never
787
Labels of values less than 5% have been removed.

67. Type of Most Recent Claim
% of Claimants
Overall Claims Index

68. Claims Servicing FNOL and Primary Servicing Contact
Vehicle Damage Claims
% of Claimants
Overall Claims Index
*Caution: Small sample size
Among Agent-Distribution collision, total loss and non-collision vehicle damage claims, while excluding bodily injury claims

69. Impact of Response Time and Claims Satisfaction
Vehicle Damage Claims
Breakpoint
% of Claimants
Overall Claims Index
Among collision, total loss and non-collision vehicle damage claims, while excluding bodily injury claims
Percentages may not equal 100% due to exclusion of "Don't know" and "Never" responses.

70. Impact of Call Back and Claims Satisfaction
Vehicle Damage Claims
Breakpoint
% of Claimants
Overall Claims Index
Among collision, total loss and non-collision vehicle damage claims, while excluding bodily injury claims
Percentages may not equal 100% due to exclusion of "Don't know" and "Never" responses.
* Caution: Small Sample Size

71. Total Cycle Time – Vehicle Damage Claims
Among Agent-Distribution collision, total loss and non-collision vehicle damage claims,
while excluding bodily injury claims
*Caution: Small sample size

72. Relationship Between Settlement Time and Settlement Satisfaction
Vehicle Damage Claims
Breakpoint
% of Claimants
Index Scores
*Caution: Small sample size
Among collision, total loss and non-collision vehicle damage claims, while excluding bodily injury claims
Percentages have been re-based to exclude of "Don't know", "Claim still under review" and "Claim denied" responses.

73. Impact of Vehicle Repair/Delivery Time on Claims Satisfaction
Overall Claims Index
% of Claimants
Repaired Vehicle Damage
Breakpoint
Repair/Delivery Time
Among collision, total loss and non-collision vehicle damage claims, while excluding bodily injury claims
Percentages may not equal 100% due to exclusion of "Don't know" and "Never" responses.
*Caution: Small sample size.

74. Received a Settlement Explanation
All Claim Types
Breakpoint
% of Claimants
Overall Claims Index

75. Direct Repair Facility Usage
Repaired Vehicle Damage Claims
Breakpoint
% of Claimants
Overall Claims Index
Among collision and non-collision vehicle damage claims that were repaired, while excluding bodily injury claims
*Caution small sample size

76. Shopping

77. Serial Shoppers, Recent Shoppers and Non-Recent Shoppers
% of Shoppers
Overall CSI 1 2 3
1”Serial Shoppers” shopped in the past 12 months and intended on shopping again
2”Recent Shoppers” shopped in the past 12 months but do not intend on shopping again
3”Non-Recent Shoppers” shopped more than 12 months ago

78. Past Shopping Behavior vs. Future Intent to Shop

79. Switching Behavior by Primary Reason for Shopping Industry Overall
*Caution: small sample size
1Among those that shopped in the past 12 months

80. Life Events Industry Overall
Shopped-Switched
Shopped-Did Not Switch
Did Not Shop
Among those that shopped in past 12 months

81. Rate of Switching by Quote Method Industry Overall
Among those that shopped in past 12 months

82. Factors Influencing Purchase Decision Industry Overall
Among those that shopped and switched in the past 12 months

83. Leading Reasons for Shopping Travelers customers shop for same reasons as others

84. Leading Reasons for Selecting Insurer Travelers less likely to select based on service, recommendation

85. Recommendations

86. Recommendations
Examine the benefits to customers of bundling, as Travelers does not enjoy the lift it should in satisfaction.
Also work to gain a greater “share of garage” through more multiple vehicle policies.
Continue efforts to empower independent agents to deliver world class service to Travelers customers.
Encourage agents and service representatives to resolve customer problems and concerns the same day registered
Encourage greater participation of agents in the claims process
Strive to minimize billing confusion by educating customers on the process at the time of the enrollment. Continue work to improve the accuracy and clarity of billing statements.
Independent-agent carriers lag the industry in billing satisfaction.
Focus improvements efforts on the Key Performance Indicators outlined in the study. In particular target the following low performing variables:
Notify customers of premium increases and discuss coverage options
Work to contact more claimants the same day as the FNOL and tighten claim cycle time
Consider greater utilization of direct repair facilities