J.D. Power Reports: One in 10 Canadian Customers Switch Auto Insurance Carriers

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1 w J.D. Power Reports: One in 10 Canadian Customers Switch Auto Carriers Belairdirect, Co-operators and The Personal Each Rank Highest In Customer Satisfaction in Their Respective Region TORONTO: 6 May 2014 One in five auto insurance customers in Canada have shopped for a new insurer in the past 12 months and 9% have switched, according to the J.D. Power 2014 Canadian Auto Satisfaction Study SM released today. Ultimately, each insurance company conquests less than an average of 1 percent of customers shopping for a new insurance policy. Brand awareness limits most carriers ability to attract shoppers, as they typically limit their search to an average of only 1.5 quotes. Even the largest national insurance companies have limited awareness, said Jeremy Bowler, senior director of the insurance practice at J.D. Power. Some of the big carriers may be well-known in one city or province, but have little or no awareness outside of that market. To grow their business, they need to build brand awareness, which traditionally requires significant advertising investment. Once an insurer wins a new customer, every touch point they have with that customer is crucial and can be the difference between a loyal customer and a defector. Study findings show that the three most critical touch points are the annual or semi-annual renewal notice; when a customer contacts their insurer for nonclaims-related reasons (62% of customers have contacted their insurer either directly or through an agent in the past 12 months regarding a non-claim-related issue); and when a customer files a claim (12% of customers filed an auto claim in the past year). KEY FINDINGS Price, historically a key differentiator among insurance companies, is having less impact on overall customer satisfaction. Price satisfaction is highest in Quebec, primarily because the government insures against injuries to people, thus bodily injury coverage is not required for vehicle owners, keeping premiums lower than in other provinces. In Ontario, auto insurance is regulated by the Financial Services Commission of Ontario, which in 2013 implemented its Auto Cost and Rate Reduction Strategy, contributing to an increase in price satisfaction of 6 points (on a 1,000- point scale). The average growth rate among all insurers included in the study is 4 percent. The largest growth rate is 24 percent, while the largest attrition rate is 11 percent. Across the three provinces in the study, overall customer satisfaction drops to 758 in 2014 from 766 in Declines in satisfaction with claims (-29 points), interaction (-13) and billing and payment (-12) account for the majority of the year-over-year drop. Price is the only factor in which satisfaction improves. The study, now in its seventh year, measures insurance customer experiences with their primary auto insurer in Canada. Customer satisfaction is measured across five factors (in order of importance): (Page 1 of 2)

2 interaction; price; policy offerings; billing and payment; and claims. Insurers are ranked in three provinces: Ontario, Alberta and Quebec. Regional Rankings Customer satisfaction in Alberta averages 744, down 3 points from from Co-operators ranks highest in customer satisfaction in Alberta with a score of 782. Alberta Motor Association ranks second (770), followed by Johnson (754). Customer satisfaction in Ontario averages 749, down 7 points from Belairdirect (784) ranks highest in Ontario, followed by CAA Company (778) and State Farm (773). Customer satisfaction in Quebec improves 2 points in 2014 to 804. In Quebec, The Personal ranks highest for a second consecutive year, with a score of 837. La Capitale ranks second (821) and Desjardins General (805) third. The 2014 Canadian Auto Satisfaction Study is based on responses from nearly 9,910 auto insurance policyholders. The study was fielded in January and February Media Relations Contacts Gal Wilder; Cohn & Wolfe; Toronto, Canada; (647) ; gal.wilder@cohnwolfe.ca Beth Daniher; Cohn & Wolfe; Toronto, Canada; (647) ; beth.daniher@cohnwolfe.ca John Tews; J.D. Power; Troy, Mich.; ; media.relations@jdpa.com About J.D. Power and Advertising/Promotional Rules About McGraw Hill Financial # # # (Page 2 of 2) NOTE: Three charts follow.

3 2014 Canadian Auto Satisfaction Study SM Alberta Co-operators 782 Alberta Motor Association 770 Johnson 754 Aviva 745 Alberta Average 744 Intact 740 TD 734 Wawanesa 734 Note: Included in the study but not ranked due to sample size are Allstate, Canadian Direct, Dominion of Canada, Economical, RBC and State Farm. Source: J.D. Power 2014 Canadian Auto Satisfaction Study SM

4 2014 Canadian Auto Satisfaction Study SM Ontario Belairdirect CAA Company State Farm Grey Power Co-operators Allstate Dominion of Canada Johnson The Personal Ontario Average Desjardins General Gore Mutual Intact RBC Economical TD Aviva Wawanesa RSA Note: Included in the study but not ranked due to sample size are Primmum and Zenith. Source: J.D. Power 2014 Canadian Auto Satisfaction Study SM

5 2014 Canadian Auto Satisfaction Study SM Quebec The Personal 837 La Capitale 821 Desjardins General 805 Quebec Average 804 Intact 801 Industrial Alliance 800 Belairdirect 798 Aviva 794 L'Union Canadienne 793 National Bank 778 TD 777 Note: Included in the study but not ranked due to sample size are Allstate, Promutuel, SSQ General and Wawanesa. Source: J.D. Power 2014 Canadian Auto Satisfaction Study SM