Long cycle times, digital-only options threaten property claim satisfaction
A report from J.D. Power shows forcing digital channels on insureds isn't the key to increasing claims satisfaction.
Despite the adoption of more digital claims tools, insurers are still struggling to improve customer satisfaction amongst challenges that include increased repair times, rising costs and varying customer needs.
The average property claim cycle time has increased by a full week since 2021 to 22 days, according to J.D. Power’s 2023 Property Claims Satisfaction Study. For those with claims involving multiple payments, customers reported receiving their final payment an average of 31.5 days into the process – which is a week longer than the previous year.
“The P&C industry playbook for the past few years has been to invest heavily in digital solutions that streamline the claims process for customers, while reducing costs and improving efficiency for carriers,” Mark Garrett, director, insurance intelligence at J.D. Power, said in a release. “However, the longer cycle times have made it increasingly difficult to keep customers informed via digital channels and limit their need to contact their insurer with questions. J.D. Power has seen a sharp rise in the number of customers contacting their insurer for information, particularly tied to these longer-tailed claims.”
Many customers welcome the streamlined, low-contact nature of digital claims reporting, but not all insureds are on-board with this shift and may still prefer to speak directly to a human being when handling a loss. J.D. Power’s report showed that among those who prefer telephone or in-person touch points in a claim, customer satisfaction was markedly lower when they were given access to only a digital copy of their repair estimate or received status updates through only digital channels. On a 1,000-point scale, overall satisfaction for these customers was 60- 70 points lower than customers who received a phone call for either of these touch points.
“Satisfaction among customers who need to primarily call their insurer for updates includes some of the lowest scores compared with other update methods,” Garrett continued in the release. “Also noted this year is that the increase in severity has driven down digital claim reporting as lower-severity claims are more likely to be reported digitally. In fact, this is the first year J.D. Power has ever seen declining use of digital claims reporting, digital used as a primary channel for status updates and for submitting photos that were used for the estimate. This is a worrying sign for the industry, as digital tools are apparently not meeting customer needs.”
To help manage varying customer expectations and increase satisfaction, the report suggests insurers offer options for how they disseminate status updates, provide accurate claim length expectations, limit customer-initiated information requests and ensure representatives are immediately available to customers.