Improved interactions drive gains in customer satisfaction with auto insurance claims in Canada: J.D. Power

Respondents to J.D. Power’s 2014 Canadian Auto Claims Satisfaction study report being significantly happier with their auto insurance company’s claims process in 2014 than in 2013.

Overall customer satisfaction with the auto claims experience averages 798 in 2014 – 11 points higher than in 2013 – driven by substantially improved interactions, notes a statement issued Monday by J.D. Power.

Key findings of the study, now in its second year, include the following:

• on average, customers who recently experienced a claim rate (based on a 1,000-point scale) their insurer 40 points higher than do customers who have not had this moment of truth and experienced the policy benefits so tangibly (798 versus 758);
• vehicles are returned 1.1 days faster, final payments are received 2.2 days faster, and claimants are being informed of settlement terms 1.6 days faster in 2014 than in 2013; and
• post-claim follow-up has significantly improved, by 7 percentage points, which positively impacts the overall experience among claimants with repairable-tow claims.

Fielded between January and March 2014, the study is based on responses from more than 2,700 auto insurance customers in Canada who settled an auto insurance claim within the past 18 months. It measures customer satisfaction with the claims process for auto physical damage loss, which depending on the complexity of the claim, may involve first notice of loss, service interaction, appraisal, repair process, rental experience and settlement.

Year over year, J.D. Power reports that the industry has significantly improved in putting claimants at ease after they report the claim (up by 4 percentage points to 61%) and in notifying repair facilities about the claim at first notice of loss (up by 6 percentage points to 30%). As well, respondents indicating they receive proactive claim status updates increased 3 percentage points to 53% in 2014.

High satisfaction levels also have benefits for insurers. Findings show that 75% of highly satisfied claimants (satisfaction scores of 900 or more) say they “definitely will” renew their policy, while 69% “definitely will” recommend their current insurer. Compare that to 11% of displeased claimants (scores of 549 or less) who say they “definitely will” renew and 3% who “definitely will” recommend.

There are, however, service areas that can be improved. Respondents report that of the service areas where insurers should focus improvement initiatives, the most impactful are the following:

• ensuring claimants feel at ease after first notifying their insurer of the loss;
• answering all claimant questions;
• providing callbacks when expected;
• reducing the need for claimants to repeat information; and
• proactively reaching out to claimants with status updates about their claim.

Jeremy Bowler, senior director of the insurance practice at J.D. Power, notes that the customer experience, in large part, rests in the hands of a number of third parties, including the repair shop, tow operator and rental car company.

“Often customers perceive the quality of the service they receive from the fulfillment partners also reflects on the insurer, and as such, blame the insurer if service fails to meet their expectations,” Bowler points out.