According to the J.D. Power 2014 U.S. Insurance Shopping Study, the satisfaction gap is narrowing between the direct channel and the agency distribution channel—historically king in satisfaction rankings.

Breaking the stats down further, the independent agency segment of the agency distribution channel posted lower scores than call centers in 2014 (840 vs. 850, respectively).

“Customer satisfaction with the [entire] agency distribution channel significantly declined, while customer satisfaction with the call center distribution channel significantly increased,” says Colleen Cairns, manager of insurance industry analytics at J.D. Power. “Agencies may be losing traction for strategies that seek to differentiate themselves—based on the sales and service provided by agents—to combat low-priced competitors.”

Customers who experienced a premium increase in 2013 were less than half as likely to shop (13%) as those who had a poor experience (28%), according to the study. So while price is the primary reason customers are less satisfied when they switch auto insurers, a poor service experience with their insurer is the leading reason customers shop in the first place—making them five times more likely to do so. And both captive and independent agents are falling behind in both areas.

“We’ve seen eroding satisfaction, driven this year by lower satisfaction scores for ease of contacting your agent, concern for your needs and courtesy,” Cairns says. “The growing use of the online channel in the new buyer purchase experience has resulted in the insurer website sub-factor increasing in importance.”

Besides service-related issues, what’s driving down satisfaction with the agency distribution channel? For the first time since it began in 2008, the study found price to be the most influential driver of customer satisfaction. “During the past six years, the drivers of customer satisfaction in the insurance market have shifted dramatically, with price playing an increasingly important role,” Cairns explains.

The study reported not only that eight in 10 customers continue to select the lowest-priced insurer, but also that in 2014, overall new-buyer satisfaction with the auto insurance purchase experience averaged 821 on a 1,000-point scale—down significantly from 828 in 2013. And the decline in satisfaction resulted from a 17-point drop in the price factor.

Rather than be pulled into a price war, independent agents should focus on improving customer service in order to help the agency distribution system reclaim the satisfaction throne. In addition to stepping up their digital game, that will require paying close attention to their marketing and advertising messages.

Cairns explains that the definition of “poor service experience” varies by customer segment—and agents should plan accordingly. Low-avoidance customers, for example, who perceive few barriers to shopping and switching insurers, shop at a higher rate than high-avoidance customers, who perceive more barriers: While only 8% of high-avoidance customers shop after a rate increase, 21% of low-avoidance customers do the same.

That means independent agents should avoid targeting serial shoppers, who shop frequently and expect a price savings when switching.

“Understanding which type of customers are more attracted to which type of business models may help tailor outreach efforts to compete,” Cairns says, pointing out that 40% of the shopping population in the study are still attracted to the agent sales and service model. “Differentiating based on sales and service provided by the agent is one way to compete.”

Jacquelyn Connelly is IA senior editor.