BY JOSEPH DOBRIAN
Technology may ease the auto insurance claims process, but it cannot fully replace humans, suggests the J.D. Power 2016 U.S. Auto Claims Satisfaction Study.SM As in last year’s study, satisfaction with the auto insurance claims process is lower among Gen Y customers (those born between 1977 and 1994) than among customers in any other age group, but Gen Y satisfaction levels are rising. Indeed, customer satisfaction is rising in all age groups, according to the study, except Gen X (those born between 1965 and 1976). Overall satisfaction among Gen Y customers averages 844 on a 1,000-point scale in 2016, up from 827 in 2015. The 17-point increase among Gen Y customers helps lift the overall industry average to 860 from 857 a year ago. Pre-Boomers (those born before 1946) have the highest satisfaction at 912, followed by Boomers (born 1946-1964) at 878 and Gen X at 847. Gen X is the only age group to experience a decline in satisfaction from a year ago: down 8 points from 2015.
The study also reports that Gen Y is the largest generational group of auto insurance claimants, at 40%—up from 33% in 2015. Gen X remains stable at 20%, while the share of Boomers and Pre-Boomers is shrinking.
“Gen Y is a large and influential segment of the claims market, so it’s encouraging to see that insurance providers continue to focus on improving this generation’s satisfaction,” said Mark Garrett, director of insurance industry analytics at J.D. Power.The U.S. Auto Claims Satisfaction Study measures customer satisfaction with their most recent automobile claim. Depending on the complexity of the claim, claimants may experience some or all of the following areas measured in the study: first notice of loss; service interaction; appraisal; repair process; rental experience; and settlement.
Use of Technology Rises during Claims Process
Of the claimants surveyed for the 2016 study, 42% went online or used the telephone to check on their claim during the claims process, a rise of 5 percentage points from the previous year. However, the study finds that overall satisfaction is highest among customers who first contacted their agent when filing a claim (882), compared with among those who filed a claim directly through the insurer’s website (848). Overall, only 7% of customers prefer to use digital channels to report their claim.
“While technology offers a customer more options, what we find is that even when customers file a digital claim they still want to talk with someone to get an explanation of the process, what to expect along the claims pathway, and the timing,” said Garrett. “Even the younger generations, which are most comfortable using digital channels, still want to talk with someone. We see the biggest gains in satisfaction when technology is used as a complementary channel for receiving status updates.”
The study also finds that 80% of customers who purchased their policy through a local agent still called their agent first to report a claim or seek advice regarding one. Among customers who called their agent first, 64% say their agent reported their claim, while 20% were transferred by their agent to a call center and 16% were redirected. Overall customer satisfaction is 882 when the agent files the claim, but slips to 858 when the customer is transferred to a call center and to 824 when they are instructed to contact the call center.
Among claimants who are delighted with their claims experience (overall satisfaction scores of 900 or higher), 84% say they “definitely will” renew their policy and 83% “definitely will” recommend their insurer. Among displeased claimants (scores of 549 and below), only 12% say they “definitely will” renew and 7% “definitely will” recommend their current insurer. Among the two-thirds of customers who have renewed their auto insurance policy since filing a claim, 28% say their insurance premiums have increased.
The Hartford Tops Insurance Rankings
The Hartford ranks highest in auto claims satisfaction with an index score of 891—a 21-point improvement from 2015. The Hartford performs particularly well in the first notice of loss and service interaction factors. Erie Insurance (886) ranks second, followed by Auto-Owners Insurance (885), American Family (874), Amica Mutual (874), and Nationwide (874).
Based on the study, J.D. Power offers the following consumer tips:
- While you’re looking for an insurer, ask your friends and family about how their insurer handles the claims process. Before you commit, ask the agent to describe the process. Ask what you can expect to happen; how and to what extent a claim will be paid; the time it will take; and the information you’ll need to provide.
- If you have a claim or think you might have one, contact your insurer immediately. Make them aware of the situation so they can act as your advocate if necessary.
- Keep your insurer’s contact information in your vehicle, in your home, and on your person.
About the Study
The 2016 U.S. Auto Claims Satisfaction Study is based on responses from 12,228 auto insurance customers who settled a claim within the past 6 months prior to taking the survey. The study excludes claimants whose vehicle incurred only glass/windshield damage or was stolen, or who only filed a roadside assistance claim. Survey data was collected from November 2015 through August 2016.