In normal economic times, insurance companies hum along quietly. We don't give them much thought. But the past year has not been normal, and consumers know it. They've felt the impact of higher rates and even loss of coverage in some states.
In 2024 (as of Sept. 10), 20 confirmed weather/climate disaster events with losses exceeding $1 billion each have hit the U.S., according to the National Centers for Environmental Information.
Earning and keeping customer trust is more important than ever for insurers. As a result, most trusted carriers stay a step ahead in this difficult environment by balancing internal efficiency with customer service. To further establish bonds with customers, they also seek to harness technology without sacrificing the human touch.
"Trust is paramount to us," said Debra Dunn, senior vice president and general manager of personal lines at USAA, which finished highly across all insurance categories in IBD's fifth annual survey of the Most Trusted Financial Companies. "With every phone call (with customers), we strive to instill trust."
As a group, home, auto and life insurance companies dipped in our most recent survey. IBD's 2024 list of the Most Trusted Financial Companies is based on a May-July survey in which thousands of people rated their financial service providers on the trust attributes that consumers said were most important to them. Our sister company, MarketWatch, is co-branding the report for a third year.
Read Our Category Stories On The 2024 Most Trusted Financial Companies In Investing, Insurance, Credit Cards And Banking.
Survey Methodology
The survey was conducted from May to July by IBD's polling partner, TechnoMetrica Market Intelligence.
There were again eight categories of companies in this year's survey: wealth managers, banks, credit cards, ETF/fund companies and online brokers, plus auto, home and life insurers.
This year we saw how customer trust in the financial companies they partner with rose in importance. Our survey respondents told us how much they value the best products and services, and that a company's customer service and ethics earn their trust. Other qualities were important to them, too.
Read the complete list of IBD's 30 Most Trusted Financial Companies for 2024.
Challenges Mount For Insurance Companies
Customer trust is particularly important when it comes to homeowners coverage. More frequent and severe weather catastrophes increased insured losses about 70% above the 10-year average. Examples included wildfires, droughts and floods.
Home insurers just had their worst underwriting result this century, making it harder to earn a profit. Rampant natural disasters impact the bottom line.
In addition to adverse weather events, inflation has driven higher home repair and rebuilding costs. Auto insurers also report increasing medical bills and fatality rates for vehicle accidents. Tighter underwriting has led some insurers to raise rates or stop writing new policies altogether in high-risk states.
While operating in a more stable environment, life insurance companies face challenges, as well. Educating consumers is a priority, as more than a quarter of younger generations cite a lack of knowledge about life insurance products as a barrier to ownership.
USAA Focuses On Old-Fashioned Customer Service
Stability breeds trust. Insurers with a long history of delivering on their promises tend to stand out among IBD survey respondents.
Founded in 1922, USAA has sold auto insurance to current and former U.S. military members, their spouses and children for 102 years. Over time, its product line has expanded to include home and life insurance.
Customer Alan Chais has been a satisfied USAA member since 1962 when he purchased his first auto policy while enrolled in his college ROTC program.
"They may be more expensive, but they have exceptional customer service," said Chais, who lives in Florida. "They're always easy to reach by phone. There's no delay in talking to someone. They're old-fashioned with that."
4 Most Trusted Home Insurance Companies
| Company | Overall rating | Soundness | Quality | Privacy | Ethics | Customer service | Prices | Sensitivity to customer needs | Confidence in mgt. |
|---|---|---|---|---|---|---|---|---|---|
| USAA | 85.5 | 92.2 | 87.9 | 87.1 | 86.4 | 85.6 | 74.8 | 75.9 | 83.3 |
| State Farm Insurance | 74.8 | 85.4 | 78 | 80.4 | 73.6 | 74.8 | 55.4 | 61 | 72.7 |
| AAA | 74.3 | 81.3 | 75.6 | 74.9 | 73.8 | 74.2 | 65.8 | 65.5 | 74.9 |
| Nationwide | 73.2 | 82.6 | 74.2 | 79.2 | 74 | 71.7 | 58.6 | 59.6 | 69.9 |
USAA earns trust by staying close to its members. The company regularly hosts what Dunn calls "innovation labs," where customers offer feedback and share ideas.
"Then we harvest that information and do rapid development testing," she said. "It's important to learn quickly, identify more needs or ancillary needs and (keep refining) what we learn."
About two years ago, for example, USAA partnered with PreFix, a home maintenance and repair firm, to help homeowners take steps to prevent claims. The idea sprung from customer input, and USAA is expanding the successful program.
USAA topped the category charts for most trusted auto and home insurer. It was second in life insurance. In the overall trust index ranking, USAA nabbed an impressive three out of the top five spots.
Nationwide's Smart Home App Helps Customers Stay Safe
USAA is not the only home insurer that cultivates trust by helping customers avoid losses. Nationwide, another highly rated company in IBD's survey, has introduced a "smart home" program that uses home monitoring devices to detect potential problems such as water leaks and power surges.
As part of the initiative, customers can choose to sign up for the pilot program, says Casey Kempton, president of personal lines at Nationwide.
Once they opt into the program, an app lets them track power surges to the home and, if necessary, take action to improve safety and prevent an electrical fire.
Customers like the new program, Kempton says, as they team up with Nationwide to address electrical and plumbing issues.
More Data, More Cost Savings
With claim costs rising due to inflation, it makes sense for insurers to work with customers on loss prevention. It's even better when policyholders can save money in the process.
USAA's SafePilot auto insurance program uses an app and other sensors to track driving habits. Members who enroll can save up to 30% on their premium based on their safe-driving score.
"We give the (driving) data back to our members to help them become safer drivers," Dunn said.
4 Most Trusted Auto Insurance Companies
| Company | Overall rating | Soundness | Quality | Privacy | Ethics | Customer service | Prices | Sensitivity to customer needs | Confidence in mgt. |
|---|---|---|---|---|---|---|---|---|---|
| USAA | 87.2 | 93.5 | 89.6 | 88.7 | 89.2 | 86.3 | 76.5 | 79.3 | 83.2 |
| Erie Insurance | 81.1 | 83.7 | 89.1 | 76.7 | 84.9 | 81.3 | 77.2 | 67.5 | 77 |
| Auto Club Exchange (AAA insurance) | 77 | 86.4 | 83 | 77.2 | 78.7 | 77.9 | 59.2 | 60.2 | 77.1 |
| Nationwide | 73.9 | 82.2 | 80.7 | 79.5 | 74.4 | 76.9 | 51.5 | 55.6 | 70.8 |
With the No. 2 ranking in auto insurance, Erie Insurance is another carrier with a long and storied history. Since launching its auto insurance business nearly a century ago, it continues to innovate.
Erie's "Rate Lock" feature lets customers pay the same price year after year for car insurance — even if they submit a claim — as long as they don't make certain changes such as adding or removing a vehicle or driver.
"Our retention is higher if you've had a claim versus those who've never had a claim," said Bob Buckel, Erie's vice president, product management.
Erie thus cements trust with its customers through its claim service.
Life Insurance Companies Find New Ways To Win Trust
Home and auto insurers can build trust with customers by handling claims well and offering loss prevention programs. But it's trickier for life insurance companies to differentiate themselves.
Still, some life insurers stand out. New York Life Insurance Co., a top three finisher in this year's Most Trusted Life Insurer category, has the highest possible ratings for financial strength from the four major credit rating agencies.
"Our financial strength is designed to make sure we'll be here when our clients need us," said Aaron Ball, senior vice president at New York Life.
The 179-year-old company has about 12,000 agents across the U.S. Aside from selling life insurance and annuities, they offer disability, long-term-care insurance and wealth management.
4 Most Trusted Life Insurance Companies
| Company | Overall rating | Soundness | Quality | Privacy | Ethics | Customer service | Prices | Sensitivity to customer needs | Confidence in mgt. |
|---|---|---|---|---|---|---|---|---|---|
| Northwestern Mutual | 85.2 | 92 | 85.9 | 87.8 | 87.6 | 82.5 | 73.5 | 76.1 | 87.2 |
| USAA | 81.4 | 84.1 | 82.7 | 82.2 | 82.2 | 81.2 | 74 | 81.1 | 79.2 |
| New York Life | 78.4 | 86.8 | 76 | 81 | 80.2 | 80.4 | 63.1 | 72.1 | 78.2 |
| Prudential | 76.9 | 86.2 | 77 | 80.6 | 77.9 | 70.9 | 69 | 68.9 | 72.8 |
"Some companies use generative AI to deliver financial advice to clients," Ball said. "We're investing in it. But we believe there's no substitute for an individual sitting with a client to help them make a good, informed decision based on holistic financial advice and guidance."
Yet another highly rated insurer with a rich history is Prudential. It will turn 150 years old in 2025.
During the pandemic, Prudential earned trust by staying in close touch with customers. Due to delayed mail deliveries and other Covid-related disruptions, the company extended grace periods for late payments.
"If a policy did lapse (for nonpayment of premium), we made extra effort to confirm that was the customer's intention," said Salene Hitchcock-Gear, president of Prudential Individual Life Insurance. "We had a lot of communication with customers to make sure their policy would stay in force."
