Auto insurers used the decline in auto damage claims during the COVID-19 pandemic as an opportunity to refine their claims processes, and customers have noticed.
According to the J.D. Power 2020 U.S. Auto Claims Satisfaction Study, the customer services improvements have led to record-high customer satisfaction. These improvements include ensuring that representatives are always immediately available; completing work when promised; and providing multiple services at first notice of loss.
“It is extremely rewarding to see the insurance industry’s exceptional work being recognized by its most important critic: the American consumer,” said Sean Kevelighan, CEO, Triple-I. “During the pandemic, the nation’s auto insurers have worked non-stop to provide relief and economic security to policyholders who had to file a claim. This is in keeping with their role as society’s financial first responders,” he said in a Triple-I news release.
Key findings of the J.D. Power study include:
Record-high customer satisfaction with auto claims: 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.
Cycle time improves as claims volume slows: Auto insurers have upped their game during the pandemic, taking advantage of the drop in frequency to increase the speed of processing for claimants. 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.
- Quantifying the COVID-19 boost: This year’s study was fielded in four waves from November 2019 through September 2020, giving J.D. Power 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 versus 72% pre-virus.
- 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.
“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.”
Given the reduced mileage on U.S. roadways this year, U.S. auto insurers are also returning over $14 billion to their customers nationwide in response to reduced driving during the pandemic, according to a Triple-I estimate.