Insurers Struggle to Deliver Seamless Digital Experience as Repair Cycle Times Rise: J.D. Power

Auto and Home Insurance Apps Become Key to Managing Customer Expectations: J.D. Power 2023 U.S. Claims Digital Satisfaction Study

Troy, MI (Dec. 5, 2023) – With customers saying their average auto repair cycle time has doubled in the past two years—now topping 23 days—and the average home repair cycle time increasing as well, insurers need to work harder than ever to manage customer expectations. According to the J.D. Power 2023 U.S. Claims Digital Experience Study^SM, digital communications channels have become the key to maintaining customer satisfaction throughout the claims process, but many insurers are still struggling to deliver a truly seamless digital experience. As a result, overall satisfaction is 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% 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% of customers said the estimation process was ‘very easy.’”

Fortunately, when these experiences go well satisfaction is very positively affected. Digital communications in the form of personalized text messages, status updates via mobile apps and guides to help reading estimates can dramatically improve that experience without significantly raising customer service costs for insurers. However, many customers still indicate they need to pick up the phone to track down a status update, often resulting in repeating information to a representative. This negatively affects the overall customer experience.

The U.S. Claims Digital Experience Study, now in its fourth year, 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.

“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.”

Key findings of the 2023 study:

• Overall satisfaction improves across most aspects of claims experience: Overall satisfaction with the auto insurance claims process this year rises 5 points (on a 1,000-point scale) to 878. This increase is driven by improvements in nearly every factor, including settlement; first notice of loss; claim servicing; estimation process; and repair process. The only factor to decline this year is rental experience, which falls 2 points.
• One-third of claimants still need to call insurer following digital update: Overall customer satisfaction with the digital claims experience is highest when claimants receive an email, text or mobile app update that answers all of their questions. However, 33% 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).
• Easy Digital experience drives satisfaction and loyalty: Among customers who state that claim reporting, estimation and settlement processes were all “very easy,” satisfaction is 948—and 86% of those customers say they “definitely will” renew their policy. Satisfaction and renewal rates fall to 895, with 69% of those who state some of those processes were very easy. Among those who state none of them were very easy, satisfaction is only 799 and only 41% say they “definitely will” renew with the same carrier.
• Few insurers manage to deliver all benefits of a digital experience: While most claimants agree that their insurer’s digital tools deliver on at least one element of a comprehensive digital experience, just 35% 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.
• Repeat photo and info submission requests sap customer experience: Overall customer satisfaction scores among the 58% of insurance claimants who only needed to submit photos of their damaged property once is 875. That score falls to 837 when they needed to submit photos two times and 806 when they needed to submit photos three times or more.

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.

For more information, refer to the J.D. Power 2023 U.S. Claims Digital Experience Study.

About J.D. Power

J.D. Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, J.D. Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on J.D. Power to guide their customer-facing strategies.

J.D. Power is headquartered in Troy, Mich., and has offices in North America, Europe, and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The J.D. Power auto shopping tool can be found at JDPower.com.

SOURCE: J.D. Power

Tags: customer experience (CX), J.D. Power, rankings, satisfaction, United States (USA)