Digital communications channels have become the key to maintaining customer satisfaction throughout the claims process as the average auto repair cycle time has doubled over the past two years—now topping 23 days, according to a new report released by J.D. Power.
The “2023 U.S. Claims Digital Experience Study,” now in its fourth year, found that many auto and homeowners insurers struggle to deliver a seamless digital experience, resulting in a decline in overall satisfaction — now at 854, down 3 points from 2022.
“Across all of our insurance claims experience studies, we find that the more insurers can do to manage expectations, keep customers updated and make it easy for them to manage the claims process without a lot of effort, the more satisfied customers become—even when repair cycle times are longer than ever,” said Mark Garrett, director of global insurance intelligence at J.D. Power.
“Customers have an expectation that using digital tools will create efficiencies in the process and keep them informed throughout their claim, but many insurers struggle to meet those expectations. Only 41 percent of customers ‘completely agree’ both expectations were met. Whether it is making the claim, submitting photos or communicating with claims staff, there are still bumps along the digital road. Notable, too, is that only 35 percent of customers said the estimation process was ‘very easy,'” he added.
Digital communications such as personalized text messages, status updates via mobile apps and guides that offer help in reading estimates dramatically improve customer experience without significantly raising customer service costs for insurers, J.D. Power added.
Many customers said they still need to pick up the phone to track down a status update, often resulting in repeating information to a representative. The report found that this negatively affects the overall customer experience.
Digital claims experience overall customer satisfaction was found to be highest when claimants receive an email, text or mobile app update that answers all of their questions. However, 33 percent of claimants say they needed to contact their insurer to ask additional questions following a digital update, causing overall satisfaction to fall 78 points (on a 1,000-point scale).
Among customers who state that claim reporting, estimation and settlement processes were all “very easy,” satisfaction is 948, with 86 percent of those customers reporting they “definitely will” renew their policy.
Satisfaction and renewal rates fall to 895, with 69 percent of those who stated some of those processes were very easy.
Among those who reported none of the processes were very easy, satisfaction was noted to be at 799 and only 41 percent say they “definitely will” renew with the same carrier.
While most claimants agree that their insurer’s digital tools deliver on at least one element of a comprehensive digital experience, far fewer (35 percent) agree that their insurer is hitting the mark on three main criteria: creates an efficient claim process; keeps customers informed; and reduces time spent on the phone.
Overall customer satisfaction scores among 58 percent of insurance claimants who only needed to submit photos of their damaged property once is 875, according to the report, but that score declines to 837 when they needed to submit photos two times and 806 when they needed to submit photos three times or more.
“Perception is everything when customers are going through an insurance claim,” said Michael Ellison, president of Corporate Insight. “If it feels like the insurer is proactively managing the process and making it efficient and easy to communicate, customers come away with a very satisfying experience. Effective use of digital channels delivers that high touch, personalized experience and digital leaders are finding they can better manage customer engagement, increasing customer satisfaction and retention when they get the formula right.”
The study evaluates digital experiences among P&C insurance customers throughout the claims process. It examines the functional aspects of desktop, mobile web and mobile apps based on four factors: visual appeal; clarity of the information; navigation; and range of services. The study is conducted in collaboration with Corporate Insight, the leading provider of competitive intelligence and user experience research to the financial services and healthcare industries.
The 2023 U.S. Claims Digital Experience Study is based on 3,184 evaluations by auto or home insurance customers who filed a claim in the past 12 months. The study was fielded from June through October 2023.