Consumers Weigh In: Choice Matters for Health Coverage

With new customers up one-third over last year, the health insurance industry continues to add policyholders at a rapid pace. According to the federal government, from the November start of enrollment through December 17, nearly six million people signed up for 2016 health insurance coverage on the federal exchanges. Within this group, 2.4 million were new customers.

The ongoing influx of newly insured Americans could put even more downward pressure on policyholder satisfaction next year. At present, customer satisfaction with health insurance has fallen to a 10-year low of 69 on the ACSI’s 0 to 100 scale. This places the industry among the bottom five in the American Customer Satisfaction Index.

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As the health insurance exchanges bring more people into the system, more opportunities open up for things to go wrong. This means that the impact of the Affordable Care Act on satisfaction is yet unclear. What is apparent, however, is that high premiums and slow claims processing do little to help consumer opinions of the industry.

There is a factor that leads to better outcomes for policyholder satisfaction: choice. ACSI data show that customers choosing individual plans are more satisfied on average (71) than those with group health insurance coverage (68). But even among group policyholders, choice plays a role. Those who are offered a choice of group plans rate their experience significantly better (70) than those with no choice (65).

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ACSI Finance and Insurance Report 2015 »

CBS MoneyWatch:  Guess Who Now Ranks With America’s Most Hated Industries »

The Fiscal Times: Americans Give Health Insurers a Big Thumbs Down »

MarketWatch: Health insurance satisfaction at a 10-Year Low (But Don’t Blame Obamacare) »

Consumers Appreciate Personal Touch of Community Banks

Regional and community banks offer a level of service that competes with the membership model of credit unions, according to recent results from the American Customer Satisfaction Index. Credit unions have a history of being a satisfaction pacesetter, scoring at or near the top among 43 ACSI industries. In 2015, the industry may be experiencing growing pains from burgeoning membership as its ACSI score drops 4.7%.

Nevertheless, credit unions continue to receive some of the best customer experience benchmarks in the ACSI. At the same time, regional and community banks show that they are no slouches when it comes to well-regarded customer service. Across an array of customer experience elements, community banks earn scores that approach—or even exceed—credit union ratings.

The high point for both credit unions and community banks is courtesy and helpfulness of staff, scoring 90 and 89, respectively, on a scale of 0 to 100. Transaction speed for both is swift (89 and 87) and interest rates are competitive (80 and 78), especially when compared with national banks (69). In fact, nearly every aspect of the customer experience offered by community banks and credit unions is deemed excellent, including service variety, account changes and information, and touchpoints like call centers and websites.

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The two areas where community banks and credit unions fall behind nationals and super regionals are number and location of branches and ATMs. While this is not surprising given the local focus of smaller institutions, clearly their customer base is craving a bigger footprint for services. The personal touch, however, is winning out over location convenience—as demonstrated by the much lower overall customer satisfaction of national banks (72) versus community banks (80) and credit unions (81).

A recent BloombergBusiness article on the popularity of local over “big banks” with millennials discusses how fewer fees and a more “high-touch” approach is driving young bank customers away from national institutions and toward community banking. Even as many banking transactions move online, young customers also look for a one-on-one approach and are more likely to seek financial advice. ACSI data demonstrate that for millennials and non-millennials alike, banks and credit unions will gain favor with customers by focusing less on collecting fees and more on delivering excellence in their customer relationships over the long haul.

BankNews: Credit Unions Losing Edge Over Community Banks on Customer Satisfaction Index »

ACSI: Finance and Insurance Customer Satisfaction Slides as Cost Cutting, Fees and Premiums Pinch Customers »