Times have not been good for the auto insurance industry. The volume of vehicle accidents is returning to pre-pandemic levels and combined with unprecedented high repair costs, historic backlogs at garages and limited availability of spare parts, it is more costly and time-consuming than ever to get customers. Vehicles back on the road after a collision. Today the JD Power 2022 US Auto Claims Satisfaction StudySM adds another bitter fact to the mix: Customer satisfaction has dropped 7 points (on a 1,000-point scale) since 2021 as customers begin to lose patience with the claims process.
“Insurers are in a difficult position as their own profitability is stretched and a variety of external factors are causing their customers to become increasingly disillusioned with the overall claims process,” he said Mark Garrett, director of global insurance intelligence at JD Power. “The best way forward is for insurers to start focusing on carefully managing customer expectations and refining their digital engagement strategies to guide their customers through the process. There is a bright spot in the study: Insurers that focused on managing timing expectations, were quickly available and responsive to customers, and offered multiple digital options for status updates were able to outperform the industry – some even improving year over year. “
The following are the key findings of the 2022 study:
- Historically slow repair process affects customer satisfaction: Overall satisfaction with the auto insurance process falls 7 points this year to 873. While satisfaction has declined in almost every factor in the study, satisfaction with the repair process is down 9 points year-over-year. This year marks the first time that a majority of customers have cited supply chain issues such as waiting for ordered parts and workshop backlogs as reasons for delays in getting their vehicle back on the road. The average repair cycle time is nearly 17 days, compared to a pre-pandemic average of about 12 days.
- Expectation management becomes the key to customer satisfaction: The average overall satisfaction of customers with a repair cycle time greater than three weeks is 837. This score increases by 71 points to 908 when customers are provided with an accurate time estimate upfront. Empathy throughout the process is key, especially with longer-term claims that can mean more effort for clients who have questions, need updates, and are trying to determine next steps.
- Claims processing is not one size fits all: Rising repair costs are threatening insurers’ profitability, increasing pressure for better cost management. This shifts the focus to digital channels as a crucial tool for efficiently managing customer relationships, but not all customers want to use such channels. In fact, 34% of customers say they have a stronger preference for collaborating with people than for digital contact. These customers also have a significantly poorer claims experience, with satisfaction levels 31 points lower than those who are equally comfortable with both human and digital contact channels.
- The right digital formula is crucial, but not easy: Not all digital experiences are the same. Using digital for status updates increases overall satisfaction by 56 points, with those using text reporting the highest satisfaction. However, when digital claim reporting (FNOL) is used via web or mobile app, overall satisfaction drops by 4 points.
- Right hand meets left hand: A common complaint about the auto insurance claims process is the need to repeatedly give the same information to different people at different points in the process. Overall satisfaction scores are lowest (840) when customers interact with three or more agents during the claims process – a drop of 13 points from last year. Scores are highest (912) – and have remained consistent year over year – when the insurer uses straight-through processing technology to automatically approve and route the claim.
Amica reciprocity ranked highest in overall customer satisfaction with a score of 903. NJM Insurance Co. (896) second and Erie Insurance (893) in third place.
The redesigned 2022 US Auto Claims Satisfaction Study is based on responses from 8,239 auto insurance customers who settled a claim in the six months prior to taking the survey. The study excludes applicants whose vehicle only suffered glass/windshield damage, was stolen, or who only made a roadside assistance claim. The study was conducted from November 2021 to September 2022.