After years of steep losses and rising rates, U.S. auto insurers are finally turning a profit again. But just as the industry regains financial strength, it faces a new and pressing challenge: keeping its most valuable customers.
The newly released J.D. Power 2025 U.S. Auto Insurance Study shows that insurers are back in the black for the first time in several years. Still, nearly 40% of customers are unhappy with their insurers, and many are considering switching providers.
“Insurers are trying to shift into growth mode now,” said Stephen Crewdson, managing director of insurance business intelligence at J.D. Power. “But satisfaction among high-value customers isn’t strong. After years of rate hikes, insurers need to focus on providing a smooth, personalized customer experience.”
Many Customers Still Dissatisfied
Overall customer satisfaction slipped slightly, dropping two points to 644 out of 1,000. But a deeper look shows a bigger problem: 38% of customers are in the lowest tier of satisfaction. These customers are much more likely to shop around and leave their current insurers.
Even more concerning is that the customers most likely to leave are not the ones bringing in the least revenue—but the most. High-value policyholders—those with longer histories, multiple policies, and higher premiums—are the least likely to renew. Only 51% of these customers say they “definitely will” stay with their current insurer. That’s lower than both medium-value (53%) and low-value (54%) policyholders.
This runs counter to the industry belief that high-value customers are more loyal. After years of rising premiums and reduced service, even these customers are questioning their loyalty.
What Keeps Customers? It’s Not Just Price
The study, based on responses from over 48,000 auto insurance customers between May 2024 and April 2025, measured satisfaction across seven areas: trust, price, people, ease of business, product offerings, problem resolution, and digital tools.
Customers still choose insurers primarily based on price. But when it comes to staying with a provider, service matters more. Fast and fair claims processes and helpful customer service are the top reasons people stay.
To win long-term loyalty, insurers must now improve how customers interact with them—across apps, websites, phone calls, and in-person visits.
“Customers want to move between digital and human support without friction,” said Crewdson. “Those who can do that report higher trust, better service, and are more likely to stay.”
Fixing Service Could Be the Next Big Investment
Insurers may need to change their focus. Instead of just adjusting rate models, they’ll need to improve customer experience. That could mean retraining agents, improving apps, or making claims easier to file.
The study also broke down which insurers performed best by region:
Amica ranked highest in New England with a score of 735.
NJM Insurance Co. led the Mid-Atlantic region (721).
Erie Insurance topped both the Southeast (718) and North Central (684).
Auto Club of Southern California (AAA) was best in California (676).
Other regional leaders included Shelter Insurance (Central), Nationwide (Texas), and CSAA Insurance Group (Southwest).
Usage-Based Insurance: Growth and Risks
Nationwide also performed best in the growing usage-based insurance (UBI) market, which relies on driving data from in-car devices or mobile apps. But the study warns that even with this tech, clear communication and customer trust are essential.
Customers must feel confident that their data is being used fairly and transparently, or they may reject these programs entirely.
Final Warning: Profits Are Back, But Trust Is Fragile
The financial crisis in auto insurance may be over, but the customer satisfaction crisis is not. To survive in this new phase, insurers must prioritize soft skills—like empathy, communication, and service quality—just as much as spreadsheets and pricing models.
The most important lesson for insurers? You can win back profits, but not without earning back trust.
