Satisfaction with Property Insurance Claims Surges, Even as Number of Catastrophes Reaches 10-Year High, J.D. Power Finds
Amica Mutual and The Hanover Rank Highest in Overall Satisfaction
COSTA MESA, Calif.: 1 March 2017 — Overall customer satisfaction among homeowners filing property insurance claims has reached a new all-time high, according to the J.D. Power 2017 U.S. Property Claims Satisfaction Study,SM released today. This surge in insurance customer satisfaction corresponds with a 10-year high in catastrophic events, which are typically associated with lower satisfaction scores.
The study measures satisfaction with the property claims experience among insurance customers who have filed a claim for damages by examining five factors (listed in order of importance): settlement; first notice of loss; estimation process; service interaction; and repair process. Satisfaction is calculated on a 1,000-point scale.
The overall Customer Satisfaction Index increases by 13 points year over year to a score of 859 in 2017, a new all-time high for the study. The largest single driver of the improvement is the settlement factor, which encompasses the fairness of the settlement amount, followed by estimation process and service interaction.
“Following the significant declines in customer satisfaction found in the 2016 study, property and casualty insurers have redoubled their efforts to improve the settlement process and fine-tune their customer interactions, efforts that have been clearly recognized and appreciated by homeowners who experienced significant losses this past year,” said Greg Hoeg, vice president of U.S. insurance operations at J.D. Power. “Still, despite the overall improvement, problem areas are evident, most notably in water-related and other complex claims that take a long time to settle and that cause significant lifestyle disruption. Insurers that manage to get the settlement process and customer interaction equation right in these types of disruptive and often catastrophic scenarios are those that raise the bar for the industry.”
Though improvements in customer satisfaction are industry-wide, they vary considerably by region and claim type. The West region posts the largest improvement nationwide, amid a relatively calm year for claim activity. A handful of states in the Central and Eastern regions—most notably Texas, Florida, and Massachusetts—which have experienced more volatile weather, post flat to declining customer satisfaction scores. Outside of those specific examples, however, weather-related claims achieve the highest overall improvement in customer satisfaction, with high wind- and hail-related claims leading the way. Conversely, water-related claims, which tend to take longer to resolve and disrupt the daily lives of homeowners, are linked to lower overall satisfaction scores.
Following are some of the key findings of the 2017 study:
- Record high satisfaction amid rising costs: The Customer Satisfaction Index for property claims has increased to an all-time high at the same time that the personal lines segment has experienced an increase in incurred loss costs and more focus on managing claims expenses. Current property claims satisfaction levels are now in line with auto claims satisfaction scores, which have historically trended higher.
- Claim type matters: One of the external issues driving this year’s industry-wide customer satisfaction improvement is an increase in hail- and wind-related weather events. High wind and hail claims are the most frequent weather-related claims in this year’s study, and both are correlated with relatively high satisfaction scores, regardless of total cycle time. Water-related claims, by contrast, are associated with the lowest satisfaction scores. On the whole, water-related claims score 39 points lower than hail-related claims.
- Claim resolution time is key: Slow resolution time is the primary driver of lower scores for water-related claims, with the time it took to settle claim attribute receiving a rating that is 0.40 points lower (on a 10-point scale) than other claims types for water-related claims.
Amica Mutual ranks highest in property insurance claims experience for a sixth consecutive year, achieving a score of 893, but this year the company is not alone. The Hanover, catapulted by a 40-point year-over-year improvement in customer satisfaction, ties Amica Mutual’s performance. Both insurers post high scores in the settlement, estimation process and repair process factors. Nationwide (882) ranks third, followed by Encompass (881), Chubb (880) and Auto-Owners Insurance (878).
USAA also achieves high levels of customer satisfaction—particularly in water-related claims—although the insurer is not included in the rankings due to the closed nature of its membership.
The 2017 Property Claims Satisfaction Study is based on more than 6,645 responses from homeowners insurance customers, and was fielded between January and November 2016.
For more information about the 2017 U.S. Property Claims Satisfaction Study, visit http://www.jdpower.com/resource/us-property-claims-satisfaction-study.
J.D. Power is a global leader in consumer insights, advisory services and data and analytics. Those capabilities enable J.D. Power to help its clients drive customer satisfaction, growth and profitability. Established in 1968, J.D. Power is headquartered in Costa Mesa, Calif., and has offices serving North/South America, Asia Pacific and Europe.
Media Relations Contacts
Geno Effler; Costa Mesa, Calif.; 714-621-6224; [email protected]
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