Having fewer auto insurance claims during the coronavirus pandemic appears to have given insurers time to refine their customer experience and deliver higher quality claims service.
According to the J.D. Power 2020, U.S. Auto Claims Satisfaction Study, a 22% decline in the frequency of auto insurance repairable claims has translated into shorter cycle times, better service delivery, and, ultimately, a record high level of customer satisfaction.
Overall satisfaction with the auto insurance claims process increased to a record-high 872 (on a 1,000-point scale), compared to 868 points from 2019. This the third straight year satisfaction has improved in the study.
Auto insurers increased the speed of processing for claimants during the pandemic and saw an increase in the percentage of policyholders who said they would definitely renew with their carriers compared to before the pandemic.
“This is important because it demonstrates that efforts to improve claimant service delivery translate directly to improved business outcomes,” said Tom Super, head of property/casualty insurance intelligence at J.D. Power, noting that increased satisfaction can mean increased intent to renew policies.
“The challenge now, of course, will be maintaining that high level of service as claims volumes start to normalize.”
- Record-high customer satisfaction with auto claims: Overall satisfaction with the auto insurance claims process increases to a record-high 872 (on a 1,000-point scale), up to four points from 2019. This is the third consecutive year of improvement in auto claims satisfaction, which has been driven by increases in performance across nearly every factor measured in the study: claim to service; estimation process; repair process; rental experience; and settlement. The only factor that has not improved year over year is the first to notice of loss, which remains flat from 2019.
- Cycle time improves as claims volume slows: Auto insurers have upped their game during the pandemic, taking advantage of the drop in frequency to increase the speed of processing for claimants. Overall cycle time for claimants with reparable vehicles has improved to just 10.3 days during the pandemic, down from the pre-virus average of 12.6 days.
- Quantifying the COVID-19 boost: This year’s study was fielded in four waves from November 2019 through September 2020, giving J.D. Power the ability to compare pre-virus levels of customer satisfaction with those experienced during the pandemic. Notably, the number of claimants who say they “definitely will” renew with their existing insurer is 76% during the pandemic vs. 72% pre-virus. Carriers have outperformed on a wide range of key performance indicators during the pandemic, including ensuring that representatives are always immediately available; completing work when promised; and providing multiple services at the first notice of loss.
- Use of direct repair program shops improves satisfaction: The industry’s growing use of directly affiliated repair shops is paying off with a significantly higher overall satisfaction score (888) than for independent repair shops (844). This is driven by quicker cycle times among direct repair shops and regular updates on progress.
The 2020 U.S. Auto Claims Satisfaction Study is based on responses from 11,055 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 was fielded from November 2019 through September 2020.