Despite a nationwide advertising blitz for mobile auto insurance apps and widespread use of digital channels to purchase insurance, U.S. auto insurance customers have been slow to adopt digital claims reporting, according to the J.D. Power 2017 U.S. Auto Claims Satisfaction Study.
The finding is significant in light of dramatically rising claims frequency and high losses, which are forcing insurers to control costs through increased reliance on technology.
“U.S. auto insurers have invested heavily in technology that will help them gain efficiencies in claims handling, but there are still certain areas of the claims process where the human touch is proving difficult to replace,” said David Pieffer, Property & Casualty Insurance Practice lead at J.D. Power. “As insurers continue down this path, it will be critical that communication with their customers is not negatively affected.”
Following are key findings of the study:
- Few customers are adopting digital first-notice-of-loss (FNOL) offerings – Nearly one-fourth (22 percent) of auto insurance customers begin their interaction with an insurer online, but just 9 percent of customers opt to report a claim digitally via the web or a mobile app. Even among Gen Y customers, who are most likely to report a claim digitally, only 12 percent are taking advantage of FNOL technology, a number that’s increased just two percentage points since 2016. Worse, overall satisfaction is 16 points lower (on a 1,000-point scale) among all customers who are using digital FNOL offerings than among those who report via phone.
- Digital appraisal and status updates are showing promise – While adoption rates and satisfaction with digital FNOL offerings have been stubbornly low, digital status updates and digital appraisal offerings, which allow customers to upload damage photos via a mobile app, are being used by roughly 16 percent of auto insurance claimants. Overall satisfaction is 33 points higher among customers who receive digital status updates than among those who do not. Customer satisfaction with digital appraisal apps is mixed based on the age of the customer, with satisfaction improving by 26 points among Gen Y and declining by 16 points among pre-boomers when using appraisal apps.
- Claim servicing is top driver of satisfaction, but results vary widely by insurer – Claim servicing is the top driver of overall customer satisfaction, but it also has the largest range of performance when comparing the highest and lowest insurer scores. The top performer in the claims servicing factor has an overall customer satisfaction score that is 104 points higher than the lowest performer.
Amica Mutual ranks highest in overall customer satisfaction with a score of 901. Auto-Owners Insurance ranks second with a score of 892 and Erie Insurance ranks third with a score of 881.
The 2017 U.S. Auto Claims Satisfaction Study is based on responses from 11,857 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. Survey data was collected from November 2016 through August 2017.
For more information about the U.S. Auto Claims Satisfaction Study, visit http://www.jdpower.com/resource/jd-power-us-auto-claims-satisfaction-study.