Insurers’ Digital Claims Tools Failing Customers: J.D. Power

March 20, 2023 by

Calling the trend “worrying,” J.D. Power’s new property claims satisfaction report indicated that insurers’ digital tools to speed the claims process are not pleasing homeowners insurance customers, especially for longer-tail claims tied to catastrophes.

According to the J.D. Power 2023 U.S. Property Claims Satisfaction Study, the property claims process following a catastrophe — which has become longer due to supply-chain delays and rising costs — has strained customer satisfaction, and the very tools insurers put in place to reduce claims costs and increase efficiency seem to have made matters worse. The average time from reporting a claim to finished repairs is now 22 days — four days longer than a year ago and a week longer than in 2021.

“The longer cycle times have made it increasingly difficult to keep customers informed via digital channels and limit their need to contact their insurer with questions,” said Mark Garrett, director, insurance intelligence at J.D. Power, which observed a sharp rise in customers contacting insurers for information.

“Satisfaction among customers who need to primarily call their insurer for updates includes some of the lowest scores compared with other update methods,” Garrett added. However, customers who prefer to speak to a person give lower satisfaction scores when forced to use digital channels.

Furthermore, the higher-severity claims seen after a catastrophe are less likely to be reported by digital means since digital tools seem to work best for lower-severity claims. J.D. Power said there was a decline in the use of digital claims reporting, status updates, and photo submissions for damage estimates. “This is a worrying sign for the industry, as digital tools are apparently not meeting customer needs,” Garrett said.

The study showed Erie Insurance ranking highest in property claims satisfaction. Overall, the industry improved 3 points but eight insurers declined in satisfaction.