Auto and Home Insurance Claims Processes Suffer Digital Growing Pains
Published Dec. 6, 2022
The ongoing digital transformation of the property and casualty (P&C) insurance industry has hit some speedbumps when it comes to customer satisfaction among those who use insurers’ digital channels to manage their claims.
According to the J.D. Power 2022 U.S. Claims Digital Experience Study, released Dec. 6, overall satisfaction with the digital claims process declines for a second consecutive year as insurers struggle to manage longer cycle times via digital channels.
“P&C insurers are facing a host of challenges that include rising repair costs as well as supply chain disruptions and shop backlog issues that are driving notably longer cycle times,” said Mark Garrett, director of P&C insurance intelligence at J.D. Power. “Longer claims create more of a need to manage customer expectations and to keep those customers informed. Digital customer engagement should be part of the solution, one that supports proactive, multi-channel engagement and regular updates with customers.
"But many customers are facing clunky interfaces, infrequent updates and frustrating workflows that force them to pick up the phone and chase down information," Garrett said. "The good news is that leading carriers have begun to crack the code on digital and they are rapidly establishing a set of best practices that could pave the way for industry-wide improvements.”
The U.S. Claims Digital Experience Study, now in its third 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 health care industries.
“Navigating the insurance claims process is not a particularly enjoyable process for any consumer, but effective digital tools can take the sting out of the equation by making it easy to exchange information with an insurer, receive frequent updates on progress and ask questions along the way,” said Michael Ellison, president of Corporate Insight. “The insurers that are setting themselves apart as leaders in this space are those that have consistently delivered simple, easy-to-use tools and proactively managed customer communications throughout the claims process.”
Key Findings of the 2022 Study
Customer satisfaction declines again: Overall customer satisfaction with the digital claims experience declines 7 points year over year to 857 (on a 1,000-point scale). This is the second consecutive year that overall satisfaction has declined.
Digital estimation creates challenges: Customer experience with the estimation process is the most notable driver of digital satisfaction, adding a significant 66 points to overall satisfaction scores when it is done well. However, insurers are meeting customer expectations just 34% of the time.
Submitting photos is a key task performed with mobile apps, but the ease of the process takes a big hit when customers still need to arrange for an in-person estimate. Electronic communications with an estimator result in the highest satisfaction scores, with video chat scoring particularly high---but just 15% of customers are using this technology.
Digital first notice of loss (FNOL) shows promise, but low adoption: Overall satisfaction with the claims process is higher among customers who use digital FNOL tools---whereby they notify their insurer of a claim via the insurer’s website or mobile app---compared with satisfaction among customers who report a claim via an insurer’s call center. Satisfaction is notably higher when services such as the estimate being scheduled, shop being notified, or rental car confirmed are provided. However, among digitally engaged customers, only 41% are using the website or app to initially report a claim.
Managing expectations via digital is critical: Customers are three times more likely to say the claims process was slower than expected when regular updates are not provided via digital channels. Conversely, they are nearly two times more likely to say the process was quicker than expected when they are provided with regular status updates through insurer websites or mobile apps.
The 2022 U.S. Claims Digital Experience Study is based on 2,890 evaluations by auto or home insurance customers who filed a claim in the past 12 months. The study was fielded from June through September 2022.
Source: J.D. Power