Insurers Improve Claims Satisfaction for 3rd Year in a Row: J.D. Power

March 3, 2015

With fewer catastrophic storms than prior years, insurance providers have been able to focus time on and apply lessons to managing non-catastrophic claims, which has resulted in a third consecutive year of higher overall satisfaction among homeowners who have filed a property claim, according to the latest J.D. Power 2015 Property Claims Satisfaction Study.

The study, now in its eighth year, measures satisfaction with the property claims experience among insurance customers who have filed a claim for damages by examining five factors: settlement; first notice of loss; estimation process; service interaction; and repair process.

With a record 25 separate catastrophic (CAT) losses in 2011 and 2012 combined, insurers have welcomed the comparatively quiet period since, with eight events in 2013 and only five in 2014 within the primary fielding period of the 2015 study. By applying the lessons learned while handling CAT claims to non-CAT claims and by putting renewed focus on their property insurance business, insurers have been able to increase property claims satisfaction to 851 (on a 1,000 point scale) in 2015, up from 840 in 2014.

“The study shows the significant gains insurers have made in customer satisfaction by applying the lessons learned while handling prior catastrophic losses to all claim processes,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power. “The big storms masked the steady progress the industry has also been making in recent years on routine claims, but we’re really seeing that shine now. ”

Bowler noted that while many insurers previously focused on managing their auto insurance claims, they are now increasing their investment of time and resources in their property insurance business. “They are getting serious about applying the knowledge from their auto business to property claims, and we’re seeing that reflected in higher customer satisfaction,” said Bowler.

Improving satisfaction is critical for insurers, as they often realize a return on their investment in customer satisfaction in the form of loyalty. Only 3 percent of customers who were delighted (satisfaction scores 900 or higher) and 7 percent of those who were pleased (scores 750-899) with their insurer during the claims process have switched carriers since their claim closed. In contrast, 9 percent of indifferent (scores 550-749) and 11 percent of displeased (scores 549 or lower) customers have switched to a different insurer. Additionally, 23 percent of indifferent customers and 42 percent of displeased customers say they “will shop” for a new provider during the next 12 months.

Key Findings

Overall satisfaction improves in each of the five factors in 2015, with the greatest year-over-year improvements in settlement and service interaction.
Satisfaction is highest when the insurance agent is the primary contact throughout the claims process (865) and lowest when the primary contact is the claims professional (793).

The percentage of customers who say their agent is their primary contact has increased to 24 percent in 2015 from 18 percent in 2014. Only 7 percent of customers say the claims professional is their primary contact in 2015, down from 9 percent in 2014.
The majority (90 percent) of full-service advice seekers—customers who value a personal relationship with their agent—contact their agent to report the first notice of loss and receive the majority of claims updates through phone calls (71 percent). On the other end of the spectrum are technologists—customers who opt to interact with their insurer through digital channels—who most often contact a call center or use their insurer’s website to begin their claims process and receive updates online or via email or texts.
Claims satisfaction is highest among Pre-Boomers (880) and is lowest among Gen Y (839) customers. Satisfaction among Boomers is 850 and 849 among Gen X customers.

Highest-Ranked Insurance Companies

Amica Mutual ranks highest in overall satisfaction with the property insurance claims experience for a fourth consecutive year, achieving a score of 888. Amica Mutual performs particularly well in nearly all study factors. Nationwide ranks second with a score of 886, followed by COUNTRY with 881.

USAA also achieves high levels of customer satisfaction, although the insurer is not included in the rankings due to the closed nature of its membership.

The 2015 Property Claims Satisfaction Study is based on more than 6,100 responses from homeowners insurance customers who filed a property claim between January 2013 and December 2014.

Overall Customer Satisfaction Index Rankings J.D. Power Circle Ratings
(Based on a 1,000-point scale) For Consumers
Amica Mutual 888 5
Nationwide 886 5
Erie Insurance 874 4
Chubb 872 4
Travelers 868 4
CSAA Insurance Group 860 4
Encompass 857 3
Allstate 856 3
State Farm 852 3
MetLife 851 3
The Hartford 851 3
Industry Average 851 3
Farmers 847 3
Safeco 847 3
Liberty Mutual 846 3
Auto Club of Southern California Insurance Group 844 3
American Family 841 3
The Hanover 826 2
Auto-Owners Insurance 822 2
Automobile Club Group 818 2
*USAA 895 5

Note: Included in the study but not award-eligible due to not meeting minimum sample requirements are Cincinnati Insurance; Homesite; Kemper; MAPFRE-Commerce Insurance; Mercury; and Shelter.

Power Circle Ratings Legend
5 – Among the best
4 – Better than most
3 – About average
2 – The rest

Source: JD Power

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