October 27, 2015 by Canadian Underwriter
While satisfaction with the auto insurance claims process in the United States is lower among Millenial claimants than among their older counterparts, the former’s satisfaction is improving, according to the J.D. Power 2015 U.S. Auto Claims Satisfaction Study released on Monday.
The study measures customer satisfaction with their most recent automobile collision 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. Satisfaction is calculated on a 1,000-point scale, J.D. Power noted in a press release.
The survey is based on responses from 11,469 auto insurance customers who settled a claim within the past six 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.
The study found that overall satisfaction with the claims filing process among the Millenial, or Gen Y, claimants – which has grown to 33% of the claims-filing population in 2015 from 28% in 2014 – has improved to 827 in 2015 from 819 in 2014. Millenials are defined as those born between 1977 and 1994.
Satisfaction has also improved among Gen X customers (those born between 1965 and 1976), who account for 20% of claimants, to 855 from 847. Pre-Boomers (born before 1946) are the most satisfied at 894, down from 911 in 2014, while satisfaction among Boomers (born between 1946 and 1964), the largest segment at 39%, is 875, down from 876 in 2014.
“The efforts the insurance providers are making to improve the claims experience among Gen Y and Gen X claimants are having an impact,” said Mark Garrett, director of insurance industry analytics at J.D. Power, in the release. “Gen Y is the only generation of auto insurance customers that is growing. It’s critical that providers continue to focus on those younger generations as they are the future of their business.”
Garrett also cautioned that insurance providers need to be careful not to take a one-size-fits-all approach, either overall or by generational group. “Consumers’ needs vary greatly based on their attitudes, preferences, plans, intentions and behaviors,” he said. “Providers need to know their customers and focus on channels and solutions that work for them.”
For example, among full-service advice seekers – customers who have a strong relationship with their agent, 81% contact their agent first for guidance or to report their claim, making what the agent does with this initial phone call a particularly important driver of customer satisfaction. Conversely, among technologists – customers who prefer to interact with their insurer via technology, satisfaction with the first notice of loss is highest (891) among the 15% who report their claim online.
But even technologists have times when they want to talk with someone from their insurance company, J.D. Power said. Once the claim is filed, more than half of technologists use such technology as a website, email or texts to receive updates throughout the process. However, technologists are most satisfied when technology updates are provided in combination with proactive phone calls from their insurer (897). While only 35% of full-service advice seekers receive updates through technology, they too are most satisfied when they receive proactive phone calls from their insurer in addition to technology updates (922).
Other findings include:
• Overall customer satisfaction with the auto insurance claims process is 857 in 2015, the same as in 2014;
• There has been a notable increase in the number of severe claims – those requiring a tow or deemed a total loss – over the past five years, and claim severity affects customer satisfaction;
• The percentage of claims for cars that are drivable and repairable has decreased to 60% of all claims in 2015, down from 69% in 2011;
• Among the 17% of customers who file a claim for which the vehicle is deemed a total loss, satisfaction drops sharply to 811, the lowest satisfaction since 2011; and
• Satisfaction with the claims experience impacts customer retention and referrals. Among “delighted” claimants (overall satisfaction of 900 or higher), 83% say they “definitely will” renew their policy and 84 percent “definitely will” recommend their insurer. Among displeased claimants (scores of 549 and below), only 10% say they “definitely will” renew and 10% “definitely will” recommend their current insurer.