J.D. Power releases new auto claims satisfaction study – PropertyCasualty360
Things are looking up when it comes to how millennials feel about the auto claims process following an accident. In the latest J.D. Power 2015 U.S. Auto Claims Satisfaction Study, claimants born between 1977-1994 (Gen Y) showed some improvement in terms of overall satisfaction with the claims-filing process, moving from 819 in 2014 to 827 in 2015 based on a 1,000-point scale. The number of Gen Y claimants also grew from 28% in 2014 to 33% in 2015.
However, Gen Y claimants are still less satisfied with the claims process in comparison to other age groups. Gen X customers (born 1965-1976), who comprise 20% of claimants, showed a marked improvement, jumping from 847 last year to 855 this year. Pre-Boomers (born before 1946), are still the most satisfied claimants, but experienced a drop in satisfaction, falling 17 points from 911 in 2014 to 894 in 2015.
Gen Y customers growing
“The efforts the insurance providers are making to improve the claims experience among Gen Y and Gen X claimants are having an impact,” said Mark Garrett, director of insurance industry analytics at J.D. Power. “Gen Y is the only generation of auto insurance customers that is growing. It’s critical that providers continue to focus on those younger generations as they are the future of their business.”
Garrett said that the improvements among Gen Y customers crossed all factors with some of the largest increases noticed in first notice of loss (+7), settlement (+8), repair process (+14) and the appraisal (+19). “Some common themes where we noticed improvements were in explaining the claims process, being kept informed, and the speed of the settlement and repair work,” explained Garrett. “Some new questions we added showed that technology adoption during the claim is much higher among Gen Y and proving to be a satisfier. For example, 42% of Gen Y received electronic updates during the claim (e-mail, text, website) and provided higher satisfaction than those who did not use technology such as boomers, who have 34% usage.”
The 17% of Gen Y claimants who submitted photos via a mobile app were also more satisfied with the process, scoring 850 vs. 823 among Gen Ys who did not submit photos. “This usage rate is much higher than other age groups with Gen X at 8% and Boomers at 4%,” added Garrett.
Auto-Owners Insurance ranked the highest in the survey, with a score of 893 – a jump of 14 points over last year’s score. Amica Mutual placed second with a score of 885, and Auto Club of Southern California Insurance Group (871), The Hartford (870) and Nationwide (866) rounded out the top five insurers.
Overall, customer satisfaction with the auto claims process remained a steady 857, the same as in 2014. According to the study, over the last five years there has been a notable increase in the number of severe claims that required either a tow or were deemed a total loss. Claim severity has a definite impact on customer satisfaction, with the figure dropping to 855 among customers who require a tow. Still, that number has increased by 16 points over the past two years, a positive sign given that the number of cars requiring a tow has increased to 22%, up from 15%.
Customers whose cars are a total loss accounted for 17% of those who file a claim and their satisfaction drops to 811 – the lowest score since 2011.
Among the reasons for their dissatisfaction are the length of time it takes to be notified of how much the insurer will pay and when the insured actually receives payment. “Our data shows that payment is not typically received until 19.5 days from FNOL (compared to 12.5 if a customer is paid for a repairable claim),” said Garrett. “Furthermore, the time from appraisal to when the customer is informed of what the insurer will pay is 7 days on average—so these customers are waiting a full week to find out what they will receive. Their expectations are not always being managed for how long the process will take as only 62% state they were provided an accurate expectation of the claim length.”
He said the delay creates more reasons for customers to call their insurer and sometimes there are delays in reaching a representative. How much an insured receives also impacts the satisfaction scores, especially for those who receive $3,000 or less.
Know your customers
Garrett says that insurance providers should understand their customers and tailor solutions to fit a broad range of needs. “Consumers’ needs vary greatly based on their attitudes, preferences, plans, intentions and behaviors,” he said. “Providers need to know their customers and focus on channels and solutions that work for them.”
The 2015 U.S. Auto Claims Satisfaction Study was based on responses from more than 11,000 policyholders who had settled a claim within the previous six months prior to taking the survey between November 2014 and September 2015.
The chart on the next page illustrates how the companies ranked in the study.