Despite technological innovations and a growing emphasis on customer service, customer satisfaction with the auto insurance industry is declining, according to a JD Power Claims Satisfaction Study.
The 2022 study showed satisfaction dropped 7 points on a 1,000-point scale to an average of 873 as customers lose patience with the complaints process, JD Power said.
“Insurers are in a tough spot with their own strained profitability and a host of external factors that are causing their customers to be increasingly disappointed with the overall claims experience,” said Mark Garrett, chief insurance officer. global insurance intelligence at JD Power.
“Nobody wants to wait 20 to 30 days to get their car back. It’s incredibly embarrassing.
— Mark Garrett, Director, Global Insurance Intelligence, JD Power
Topping the list of factors contributing to dissatisfaction are the volume of vehicle collisions, which have returned to pre-pandemic levels, record repair costs, historical backlogs at repair shops and limited availability of spare parts. replacement.
But, perhaps surprisingly, the study results could have been worse, Garrett said.
In fact, I expected satisfaction to drop more,” he said. “I thought we were going to see the whole industry down, with tons of carriers down double digits. So I think the most surprising thing is that some carriers haven’t dropped in satisfaction.
Amica Mutual ranked first for overall customer satisfaction with a score of 903. NJM Insurance Co. (896) ranks second and Erie Insurance (893) ranks third. Bringing up the rear were National General (838), Mercury (830) and Kemper (798).
A historically slow repair process was cited as one of the most common reasons for dissatisfaction.
“Nobody wants to wait 20 to 30 days to get their car back,” Garrett said. “It’s incredibly embarrassing.”
Supply chain issues cited
This year marked the first time that a majority of customers cited supply chain issues such as waiting for parts on order and repair shop backlog as reasons for delays in getting their vehicle back on the road. the road. The average repair cycle time is almost 17 days, compared to an average of about 12 days before the pandemic.
The average overall satisfaction score for customers with a repair cycle time greater than three weeks was 837. This score increases from 71 points to 908 when customers are given an accurate time estimate beforehand. “Being empathetic throughout the process is key, especially for longer-term complaints which can create more stress for customers who have questions, need updates, and are trying to figure out what’s next. stages,” the report said.
Rising repair costs, of course, was another factor cited, pushing insurers to better manage expenses.
Focus on digital channels
“It emphasizes digital channels as an essential tool for effectively managing customer relationships, but not all customers want to use these channels,” the report said. “In fact, 34% of customers say they prefer working with people over using digital contact. These customers also have a significantly worse complaints experience, as satisfaction is 31 points lower than those who are equally comfortable with people and digital as contact channels.
When digital tools are used to provide status updates, overall satisfaction increases by 56 points, with those using text messaging having the highest levels of satisfaction. However, when digital is used to report the first notice of claim via the internet or a mobile app, overall satisfaction drops by 4 points.
Another common complaint about the auto insurance claims process is the need to repeatedly provide the same information to different people or entities at different times in the process. Overall satisfaction scores are lowest (840) when customers interact with three or more representatives during the claims process, down 13 points from a year ago. Scores are highest (912) — and have remained stable year over year — when the insurer uses technology to automatically approve and route the claim.
Asked why Amica consistently earns top marks in the Automotive Satisfaction Study, as well as other JD Power surveys, Garrett said he thinks the company has a culture dedicated to customer service.
Amica has been the perennial winner in almost all of our studies,” he said. And I think it has to do with their customer service culture, which tends to give them a lot of leeway with their customers. It’s part of the DNA of the company, which has been so focused on service and providing a great experience.
Doug Bailey is a freelance journalist and writer who lives outside of Boston. He can be reached at [email protected].
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