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ACSI ABOUT ACSI The American Customer Satisfaction Index (ACSI ® ) is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United States. The ACSI uses data from interviews with roughly 250,000 customers annually as inputs to an econometric model for analyzing customer satisfaction with more than 380 companies in 46 industries and 10 economic sectors, including various services of federal and local government agencies. ACSI results are released throughout the year, with all measures reported on a scale of 0 to 100. ACSI data have proven to be strongly related to several essential indicators of micro and macroeconomic performance. For example, firms with higher levels of customer satisfaction tend to have higher earnings and stock returns relative to competitors. Stock portfolios based on companies that show strong performance in ACSI deliver excess returns in up markets as well as down markets. At the macro level, customer satisfaction has been shown to be predictive of both consumer spending and GDP growth. American Customer Satisfaction Index ® ©2018 ACSI LLC. ALL RIGHTS RESERVED. November 13, 2018 ACSI FINANCE & INSURANCE REPORT 2018 INDUSTRY RESULTS FOR: Banks Credit Unions Health Insurance Property & Casualty Insurance Life Insurance Internet Investment Services Financial Advisors Life Insurance 80 +2.6% Health Insurance 73 0.0% Banks 81 0.0% Credit Unions 81 -1.2% Property & Casualty Insurance 81 +1.3% Internet Investment Services 79 0.0% Financial Advisors 80 -1.2%

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Page 1: ACSI American Customer Satisfaction Index · ACSI Finance & Insurance Report 2018 ACSI 3 | INFO@THEACSI.ORG ©2018 ACSI LLC. ALL RIGHTS RESERVED. On average, banks provide excellent

ACSI

ABOUT ACSIThe American Customer

Satisfaction Index (ACSI®) is a

national economic indicator of

customer evaluations of the quality

of products and services available

to household consumers in the

United States.

The ACSI uses data from

interviews with roughly 250,000

customers annually as inputs

to an econometric model for

analyzing customer satisfaction

with more than 380 companies

in 46 industries and 10 economic

sectors, including various services

of federal and local government

agencies.

ACSI results are released

throughout the year, with all

measures reported on a scale of

0 to 100. ACSI data have proven

to be strongly related to several

essential indicators of micro and

macroeconomic performance. For

example, firms with higher levels of

customer satisfaction tend to have

higher earnings and stock returns

relative to competitors. Stock

portfolios based on companies

that show strong performance in

ACSI deliver excess returns in up

markets as well as down markets.

At the macro level, customer

satisfaction has been shown to

be predictive of both consumer

spending and GDP growth.

American CustomerSatisfaction Index®

©2018 ACSI LLC. ALL RIGHTS RESERVED.

November 13, 2018

ACSI FINANCE & INSURANCE REPORT 2018

INDUSTRY RESULTS FOR:

Banks

Credit Unions

Health Insurance

Property & Casualty Insurance

Life Insurance

Internet Investment Services

Financial Advisors

Life Insurance

80 +2.6%

Health Insurance73 0.0%

Banks81 0.0%

Credit Unions81 -1.2%

Property & Casualty Insurance

81 +1.3%

Internet Investment Services

79 0.0%

Financial Advisors

80 -1.2%

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According to new data from the American Customer Satisfaction Index (ACSI®), customer satisfaction with the Finance and Insurance sector is up 1.4% to an ACSI score of 78.3 on a scale of 0 to 100—a 24-year high for the sector. The sector includes seven industries: banks, credit unions, health insurance, property and casualty insurance, life insurance, internet investment services, and financial advisors.

BANKS

A year ago, customer satisfaction with retail banks reached an all-time high as mobile banking hit its stride. For 2018, the industry maintains record-high customer satisfaction at an ACSI score of 81 and marks the first year that banks rate as high as credit unions.

Credit Unions Lose Satisfaction Edge Over Banks

ACSI Finance & Insurance Report 2018

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According to customers, smaller banks still provide better, more personalized service. Regional and community banks continue to lead the category with a combined score of 84, despite slipping 1.2% from a year ago. After posting a strong gain in 2016, super regional banks are stable for a third year at 79. National banks rank lowest, retreating 1.3% to 77.

Among national banks, Chase stands out as the best in customer satisfaction, as well as the only gainer in the category (+1% to 80). Chase has made significant improvements over the past four years to emerge as the top-rated national bank in the ACSI. In addition to its highly rated mobile banking app, Chase customers appreciate their easy access to brick-and-mortar locations and ATMs—Chase has more than 5,000 branches in 25 states and 16,000 ATMs nationwide.

Former leader Citibank falls 2% to 79 but remains ahead of the national bank average. Citibank has announced that it is restructuring to a regional model following reports that profitability and share deposits are lagging.

Bank of America, on the other hand, comes in just below average following a 1% dip to 76. Wells Fargo remains in last place, unchanged at 74.

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Among super regional banks, Capital One and SunTrust Bank break away from the rest of the pack with matching 1% gains to tie for first place at 81. TD Bank is close behind, unchanged at 80, followed by three banks that match the category average. A 2% downturn for Regions Bank yields a three-way tie with U.S. Bank and BB&T (each down 1%) at 79.

Citizens Bank inches up 1% to meet PNC Bank (unchanged) at 78, just below the category average. KeyBank registers the most improvement among super regional banks with a 3% boost to 77. Fifth Third Bank falls to last place with a 1% downturn to 75. According to its customers, Fifth Third Bank’s interest rates are less competitive compared with most other banks.

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On average, banks provide excellent in-branch customer service as the courtesy and helpfulness of staff remains the best part of the customer experience (88). Banks have also made considerable progress with their online presence as website satisfaction improves (86). In addition, mobile apps rank high in terms of quality (86) and reliability (85). On the low end, the competitiveness of interest rates remains among the worst-rated aspects of banking (74). In addition, ongoing bank closures leave customers less happy with the number and location of ATMs (-3% to 73) and branches (-4% to 71).

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Looking at the customer experience across the three bank categories, the group of smaller regional and community banks outperforms both national and super regional banks on just about every aspect of the customer experience. According to customers, the two advantages larger national banks offer are more branches and ATMs (both 77). For mobile banking, national banks do better than super regional banks, on average, but community banks still rate highest for the quality and reliability of mobile apps (both 87).

CREDIT UNIONS

For credit unions, a 10-year lead over banks has come to an end as customer satisfaction wanes by 1.2% to an ACSI score of 81. The 2008 financial crisis was a boon for credit unions in terms of growing membership. Fed up with big banks, many customers took their business to credit unions where they received better, more individually tailored service. But with the economy much improved, there is less incentive to join credit unions—particularly if they no longer provide higher levels of satisfaction than banks do.

Overall, in-person customer service is still slightly superior at credit unions (89) compared to banks (88). However, smaller regional and community banks outperform credit unions when it comes to mobile banking. Community banks offer better quality and reliability of mobile apps (both 87) compared to credit unions (85 for quality and 83 for reliability).

Across the credit union member experience, most aspects are the same or worse than a year ago. According to their members, credit unions offer fewer financial services (83) and account information is less clear (82). In addition, it is not as easy to open new accounts or make changes (-2% to 82) and interest rates are less competitive (-3% to 77). On the other hand, call centers are improving (84), along with service speed (88).

As is the case for smaller community and regional banks, the number of branch locations (-1% to 70) and ATMs (-3% to 69) are the least satisfying aspects of the credit union experience.

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HEALTH INSURANCE

After two years of gains, customer satisfaction with health insurance is flat at an ACSI score of 73. Health insurance is, by far, the most problematic and least satisfying category in the sector, in part because it is also the most complicated and controversial. It is much more difficult to deliver high-quality customer service and assess value for health insurance compared with other financial services.

A year ago, large gains for Humana and Kaiser Permanente lifted them into a dead heat for the lead. Although they remain tied for the top spot, each decline by 1% to 78. According to policyholders, Kaiser Permanente is among the fastest to process claims and offers the best prescription coverage, while Humana has better access to primary and specialty care.

As the trend toward consolidation in the health care sector continues, the only companies with gains in customer satisfaction are now in the process of separate mergers: Cigna and Aetna. Leading up to its merger with CVS, Aetna inches up 1% to 75. Aetna also has the top-rated mobile app in the industry. Cigna, which is acquiring Express Scripts, posts a huge gain of 11%, moving out of last place to meet the industry average (73). Cigna also has the lowest complaint rate in the industry.

Tied with Cigna, UnitedHealth is unmoved at 73, whereas Blue Cross and Blue Shield slumps to the bottom of the category with a 1% downturn to 70.

Overall, the industry has improved access to primary care doctors (80), but access to specialty care remains steady at 78. Compared to other industries in the sector, health insurance mobile apps have room for improvement in terms of reliability (79) and quality (78). Moreover, website satisfaction is moving in the wrong direction, down 3% to 76.

Policyholders say that coverage of standard medical services is slightly better than it was a year ago (77), but prescription drug coverage is unchanged (76). The ease of submitting claims (77) and the speed with which they are processed (75) show no improvement.

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According to policyholders, it is difficult to understand information on insurance statements (74), and while the range of available plans is slightly better, it still needs to improve (74). The worst aspect of health insurance, however, is speaking to call center representatives. Call center satisfaction falls 5% to 71—by far the lowest score in the sector.

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PROPERTY AND CASUALTY INSURANCE

After the most catastrophes since 2005, insurers exhibit strength and resilience. Policyholder satisfaction with property and casualty insurance is up 1.3% to an ACSI score of 81, and price increases have been modest and slow. Smaller insurance firms take the lead, climbing 4% to a combined score of 83.

State Farm gains 3% joining AAA (-1%) in second place at 81. Nationwide is the most improved (+5% to 80), and ties with Farmers (+1%), GEICO, and Farm Bureau (both unchanged). Nationwide customers give the firm exceptionally high marks for its mobile app, which allows consumers to start and process claims from their mobile devices.

American Family slips 1% and Travelers drops 3% to match Allstate and Progressive (both unchanged) at 78. Liberty Mutual has the largest decline, tumbling 5% to the bottom of the category at 76. While Liberty Mutual scores very well for claims service and processing, policyholders don’t find their services to be a good trade-off for the price.

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Property and casualty insurers earn high marks for the quality of their mobile apps (87), which are considered reliable (85). Nevertheless, website satisfaction slides to 83.

Customer service staff performance for claims handling is excellent, up 2% to 86, and the speed with which claims are processed and completed shows marked improvement (+6% to 85). Representatives have also become better at answering questions about general information, policies, and renewals (+2% to 85). Bills are easier to understand (84) and call centers have improved (82). Customers note an increase in policy discounts and rewards, but still find their availability to be somewhat lacking (77).

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LIFE INSURANCE

Policyholder satisfaction with life insurers climbs 2.6% to an ACSI score of 80 as “hybrid” life insurance-backed long-term care policies show tremendous growth. Nearly a quarter of all new U.S. life insurance premiums paid went to policies that offer benefits for long-term care or chronic illness.

New York Life is in first place after a 5% increase to 84. Mutual of Omaha improves as well, up 4% to 83 and tied with Northwestern Mutual (unchanged). All three industry leaders earn high marks from policyholders for agent courtesy and helpfulness, as well as speed of policy approval.

MetLife, which stopped selling new individual life insurance policies last year, improves customer satisfaction with its remaining policyholders by 5% to 81. The group of smaller life insurers gains 3% to 79 but stays just below the industry average. Likewise, Primerica jumps 5% to 78, matching Lincoln Financial (+3%).

The remaining life insurers deteriorate. Prudential slips by 1% and State Farm by 3% to meet at 77. Allstate and Farmers tumble to the bottom of the industry after scoring close to the industry average a year ago. Allstate drops 5% to 75 and Farmers falls 4% to 74. Both insurance providers receive low ratings for the timeliness of their policy approval process.

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Overall, policyholders are very satisfied with the apps available from life insurers. Mobile app reliability (90) and quality (89) are extremely high.

Website satisfaction is unchanged at 83, and policies are approved as quickly and efficiently as a year ago (82). On the other hand, agent courtesy and helpfulness slips to 81.

Policyholders note some increase in the variety of policy options (80). They also better understand how their premiums are calculated but there is room for improvement here (76). Customers still find policy discounts to be lacking as this element slips further to 74—the low point for the industry.

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INTERNET INVESTMENT SERVICES

Customer satisfaction with internet investment services is unchanged at an ACSI score of 79 despite the strength of the financial market. A 1% gain lifts Edward Jones to first place at 81. The firm is popular with new investors because it does not have an investment minimum. According to users, the Edward Jones website is easy to navigate and customer support is excellent.

Smaller online investment service providers also register an ACSI gain, up 3% to a combined score of 80. Likewise, Merrill Edge improves 3% to 79. After lagging behind last year, Merrill Edge joins several firms clustered at the industry average. Among these are Charles Schwab (-1%), Fidelity (-1%), and E*Trade (unchanged), all of which are down or flat year over year.

The biggest decline, however, goes to Vanguard. The firm falls out of first place with a 4% drop to 79 after experiencing a raft of periodic systems issues this year, including emails generated in error. According to investors, customer support is lacking for Vanguard.

After acquiring Scottrade, TD Ameritrade wanes 3% to the bottom of the category at 77. Historical ACSI data show that mergers and acquisitions typically have a negative impact on customer satisfaction—at least in the short term. It can be difficult to maintain the service levels that customers expect until systems are integrated.

Users give high marks to the mobile apps of online investment services in terms of quality and reliability (both 82). Investors are satisfied with the variety of products available (81), but many aspects of the user experience show some deterioration. Ease of making an investment transaction (81), site performance (80), and navigation (79) are all down slightly compared to a year ago. In addition, investment product

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FINANCIAL ADVISORS

Customer satisfaction with financial advisors weakens by 1.2% to an ACSI score of 80. Charles Schwab manages to take the lead without moving (unchanged at 82) as smaller firms fall back 2% to 81.

information is less useful (78), and customer support diminishes 3% to 78. The lowest-rated elements are investment research information and planning tools (both 77).

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Morgan Stanley (-2%) and Wells Fargo (-1%) each fall to 79, a level also occupied by Fidelity and Merrill Lynch (both unchanged). LPL Financial takes the biggest hit, down 5% to 78 at the bottom of the category. Its website satisfaction lags the category as well. The firm acknowledged user trouble with a new technology rollout and was recently fined $2.75 million for mishandling client complaints and failures in its anti-money laundering program.

Financial advisory firms receive good marks for the quality of their mobile apps (86), although mobile reliability rates somewhat lower (84). Clients also say mobile options for account management are lacking (-3% to 76).

According to clients, it is very easy to open accounts (85), but advisors could improve on the way that they explain investment plans, goals, and strategies (-2% to 80).

Website satisfaction and call center satisfaction are both stable at 83. Likewise, overall trust and confidence is steady (83), as is investment performance (81). On the other hand, clients indicate that the frequency with which advisors reach out to them could be improved—both in terms of routine written contact (-1% to 80) and personal contact (-3% to 77). Other lower-scoring areas show signs of decline. Clients view prices and fees as less competitive (-1% to 79) and not adequately explained (-3% to 78).

Independent advisors, on the other hand, improve with a 3% gain to 81 and match Raymond James (unchanged). Investors say they have more trust and confidence in independent advisors than in large firms. UBS inches up 1% to 80, on par with the industry average.

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ABOUT THIS REPORT

The ACSI Finance and Insurance Report 2018 on banks, credit unions, health insurance, property/casualty insurance, life insurance, internet investment services, and financial advisors is based on interviews with 25,555 customers, chosen at random and contacted via email between October 2, 2017, and September 26, 2018. Customers are asked to evaluate their recent experiences with financial services provided by the largest firms in terms of market share, plus an aggregate category consisting of “all other”—and thus smaller—companies in these industries.

The survey data are used as inputs to ACSI’s cause-and-effect econometric model, which estimates customer satisfaction as the result of the survey-measured inputs of customer expectations, perceptions of quality, and perceptions of value. The ACSI model, in turn, links customer satisfaction with the survey-measured outcomes of customer complaints and customer loyalty. ACSI clients receive confidential industry-competitive and best-in-class data on all modeled variables and customer experience benchmarks.

ACSI and its logo are Registered Marks of the University of Michigan, licensed worldwide exclusively to American Customer Satisfaction Index LLC with the right to sublicense.

No advertising or other promotional use can be made of the data and information in this report without the express prior written consent of ACSI LLC.

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18 WWW.THEACSI.ORG | [email protected] ©2018 ACSI LLC. ALL RIGHTS RESERVED.