One silver lining to the COVID-19 pandemic: a 22% decline in frequency of auto insurance repairable claims, translates into a record high level of customer satisfaction, according to the J.D. Power 2020 U.S. Auto Claims Satisfaction Study. Why the transformation? J.D. Power says insurers have been able to apply a “laser focus on quality service” which has translated into shorter cycle times and better service delivery.
“The sharp decline in claims volume during the pandemic has served as a test case for the industry in how to make improvements in service delivery that translates directly to increased satisfaction and increased intent to renew,” said Tom Super, head of property and casualty insurance intelligence at J.D. Power. “This is important because it demonstrates that efforts to improve claimant service delivery translates directly to improved business outcomes. The challenge now, of course, will be maintaining that high level of service as claims volumes start to normalize.”
Customer Satisfaction and Cycle Time
Overall satisfaction with the auto insurance claims process increases to a record-high 872 (on a 1,000-point scale), up 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 servicing; estimation process; repair process; rental experience; and settlement. The only factor that has not improved year over year is first notice of loss, which remains flat from 2019, the survey shows.
Auto insurers have taken advantage of the drop in frequency to increase the speed of processing for claimants, the survey shows. 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.
Another interesting finding is that use of direct repair program (DRP) 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 DRP shops and regular updates on progress,” says J.D. Power.
This year’s study was fielded in four waves from November 2019 through September 2020, which J.D. Power reports gave them 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 first notice of loss.
NJM Insurance Co. ranks highest in overall customer satisfaction with a score of 909. Amica Mutual (907) ranks second and Auto-Owners Insurance (890) ranks third.
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.