Customer satisfaction with auto insurance industry falls, study finds – Insurance News Net | CarTailz

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 fell 7 points on a 1,000-point scale to an average of 873 as customers lose patience with the claims process, JD Power said.

“Insurers are in a difficult position as their own profitability is stretched and a variety of external factors are causing their customers to become increasingly disillusioned with the overall claims experience,” said Mark Garrett, director of global insurance intelligence at JD Power.

“Nobody wants to wait 20 to 30 days to get their car back. It’s incredibly uncomfortable.”
– Mark Garrett, Director, Global Insurance Intelligence, JD Power

Topping the list of factors contributing to dissatisfaction are the number of vehicle accidents that have returned to pre-pandemic levels, record high repair costs, historical backlogs at repair shops and limited availability of spare parts.

But, perhaps surprisingly, the study’s results could have been worse, Garrett said.
I actually expected that satisfaction would continue to drop,” he said. “I thought we were going to see the entire industry collapse with tons of carriers down by double digits. In my opinion, it was all the more surprising that the satisfaction of some freight forwarders did not decrease.”

Amica Mutual achieved the highest overall customer satisfaction with 903 points. NJM Insurance Co. (896) is second and Erie Insurance (893) is third. Bringing up the rear are National General (838), Mercury (830) and Kemper (798).

A historically slow repair process was cited as one of the most common reasons for dissatisfaction.

“No one wants to wait 20 to 30 days to get their car back,” Garrett said. “It’s incredibly uncomfortable.”

called supply chain issues

This year was the first time that a majority of customers cited supply chain issues such as waiting for ordered parts and workshop backlogs as reasons for delays in getting their vehicle back into service. The average repair cycle time is nearly 17 days, compared to a pre-pandemic average of about 12 days.

The average overall satisfaction of customers with a repair cycle time of more than three weeks was 837. This score increases by 71 points to 908 when customers are provided with an accurate time estimate beforehand. “It’s critical to be empathetic throughout the process, especially for longer-term claims, which can mean more effort for customers who have questions, need updates, and are trying to determine next steps,” the report reads.

Of course, rising repair costs were another factor pushing insurers to better manage costs.

Focus on digital channels

“This shifts the focus to digital channels as a crucial tool for efficiently managing customer relationships, but not all customers want to use such channels,” the report states. “In fact, 34% of customers say they prefer collaborating with people over digital. These customers also have a significantly poorer claims experience, with satisfaction levels 31 points lower than those who are equally comfortable with both human and digital contact channels.”

When digital tools are used to provide status updates, overall satisfaction increases by 56 points, with those using text messaging reporting the highest satisfaction. However, when digital is used to report the first claim via web or 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 organizations at different points in the process. Overall satisfaction scores are lowest (840) when customers interact with three or more agents during the claims process – a drop of 13 points from last year. Scores are highest (912) – and have remained consistent year over year – when the insurer uses technology to automatically approve and route the claim.

When asked why Amica consistently came out on top in JD Power’s Auto Satisfaction Study and other surveys, Garrett said he believes the company has a culture dedicated to customer service.’
Amica was the consistent 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 that has been so focused on service and providing a great experience.

Doug Bailey is a journalist and freelance writer based outside of Boston. He can be reached at [email protected].

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