Insurance Industry’s Responsiveness and Concern for the Claimant Drives Continued Improvement in Satisfaction with Auto Insurance Claims
Amica Mutual Ranks Highest in Auto Claims Satisfaction
WESTLAKE VILLAGE, Calif.: 27 October 2014 — Auto insurance companies’ focus on their customers during the claims process is reflected in the continuing improvement in satisfaction, according to the J.D. Power 2014 U.S. Auto Claims Satisfaction StudySM released today.
The study measures customer satisfaction with the claims experience for auto physical damage loss. Depending on the complexity of a claim, claimants may experience some or all of the following factors measured in the study: first notice of loss; service interaction; appraisal; repair process; rental experience; and settlement.
Overall customer satisfaction with the auto insurance claims process has improved steadily during the past five years to 857 on a 1,000-point scale in 2014 from 842 in 2010. While overall satisfaction improves by a modest 2 points compared with 2013, satisfaction in the service interaction factor increases significantly (+7 points) year over year. Within service interaction, claim professional satisfaction increases significantly (+17) in 2014, primarily driven by higher ratings for responsiveness and concern for the claimant’s situation.
“Insurance companies are placing more emphasis on training their employees and representatives to be customer-centric, especially during the interaction process,” said Jeremy Bowler, senior director of the global insurance practice at J.D. Power. “That focus is reflected in the increase in satisfaction, specifically with claim professionals, whose primary responsibility is to accurately estimate the amount of the insurance settlement. Historically, those individuals have been recruited and trained for their technical knowledge but haven’t always been known for being customer service-oriented.”
The study finds that the average severity of claims (based on the dollar amount of the loss) has increased for a third consecutive year. That increase in severity is due to a rise in more complex claims—those in which vehicles have significant structural damage and need to be towed—which account for 20 percent of auto claims and 17 percent of claims in which the vehicle is declared a total loss. That rise represents a 5 percentage point increase from 2011 when complex claims represented 32 percent of all auto claims.
Despite an increase in number of complex claims, insurers are doing a better job handling more complex claims, which typically result in much lower satisfaction scores. Satisfaction with total loss claims in 2014 averages 829, compared with 851 for towed vehicle claims, each claim type improving by 12 points from 2013. Satisfaction with claims in which the vehicle was still drivable after the accident averages 867, down 1 point from 2013. Those improvements in satisfaction with insurers’ handling of complex claims are largely due to insurers managing customer expectations with respect to the timing of the claim and moving the claim along more quickly—key metrics of communicating the settlement, repair time, and paying the customer (if applicable) are all performed faster in 2014.
- Satisfaction with the claims experience impacts customer retention and referrals. Among delighted claimants (overall satisfaction of 900 or higher), 79 percent say they “definitely will” renew their policy and recommend their insurer. Among displeased claimants (scores of 549 and below), only 13 percent say they “definitely will’ renew and 7 percent “definitely will” recommend their current insurer.
- Technology-supported, proactive communication increases satisfaction. The percentage of customers receiving email updates on their claim status increases to 24 percent in 2014 from 15 percent in 2011. Satisfaction is highest among claimants who receive digital updates through email, text or smartphone apps.
- Satisfaction is 918 among the 53 percent of claimants whose agent initiated contact with them during the claims process, compared with 827 among those who initiated contact with their agent.
- Satisfaction among the 65 percent of claimants who indicate they were provided options of how they could receive claim updates averages 887, compared with 798 among those who are not.
- On average, it takes 13.4 days from the time loss is reported to the insurer until the vehicle is repaired and returned, 0.2 of a day faster than in 2013. The improvement is due to improved performance when dealing with towed claims, which are repaired and returned 1.6 days faster in 2014 than in 2013 (15.0 days vs. 16.6, respectively). For vehicles declared a total loss, it takes an average of 18.3 days from the time the loss is reported until the claim is paid.
- Satisfaction is highest among Pre-Boomers (born before 1946) at 911 and lowest among Gen Y (born between 1977 and 1994) claimants at 819. Satisfaction among Boomers (born between 1946 and 1964) is 876, while it is 847 among Gen X (born between 1965 and 1976) claimants.
Amica Mutual ranks highest in auto claims satisfaction with an index score of 900, a 29-point improvement from 2013. Auto-Owners Insurance ranks second (879), followed by State Farm (869), American Family (868) and Auto Club of Southern California Insurance Group (867). USAA achieves a score of 896, but is not award-eligible because it is an insurance provider open only to U.S. military personnel and their families.
The 2014 U.S. Auto Claims Satisfaction Study is based on responses from 10,891 auto insurance customers who settled a claim within the past six months. The study excludes claimants whose vehicle incurred only glass/windshield damage or was stolen, or who only filed roadside assistance claims. Survey data was collected between November 2013 and August 2014.
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