J.D. Power: Digital claims process can drive customer satisfaction

While the average repair cycle time for claims is down, according to the J.D. Power 2024 U.S. Auto Claims Satisfaction Study, the average repair cost and premiums have increased over the past two years.

The study, based on responses from 9,725 auto insurance customers who have settled a claim within the past nine months, revealed that the average is down five days, from 23.9 days in the early fielding period of this year to only 18.9 days. The average repair cost, however, rose 26% in two years, and premiums are up 15% in the past year.

According to J.D. Power, this is heavily impacting customer satisfaction. Of those surveyed, nearly half, 48%, saw a premium increase over the past 12 months. Satisfaction is low among customers who experienced increases before a claim, which negatively affected their experience when entering the claims process.

"The claims process is the moment of truth for auto insurance customers, so when they experience rate increases and then have a claim with longer-than-expected repair times and other inconveniences, their overall trust in the brand is greatly diminished," said Mark Garrett, director of global insurance intelligence at J.D. Power, in the news release. "In fact, 80% of auto insurance customers who have poor claims experiences have already left or say they plan to leave that carrier. That makes this year's significant improvement in repair cycle times very good news for insurers and their customers. However, premium increases have created a new challenge for insurers as trust is eroding and affecting the way customers view their claims. There are still many challenges the industry needs to navigate to maintain customer loyalty."

J.D. Power suggests that communication is the most important aspect of improving customer satisfaction; accessibility, timely responses and consistency are critical throughout the claims process. Digital tools play another important role, according to the survey, as carriers' mobile apps are performing well in the claims process. J.D. Power says that digital tools are receiving higher scores in satisfaction than call centers or agents, for the first time in three years. Mobile apps score the highest, and satisfaction is highest for customers who submit photographs and receive updates. The study notes, however, that this group is only 13% and customers and that the Boomer and Silent generations are hesitant to fully adopt digital in the claims process.