Problems using the transition to digital services are adding to consumers’ dissatisfaction with their insurance companies, while consumer adoption of the new technology remains “stubbornly low” in the property and casualty field, according to two recent reports by J.D. Power.
The J.D. Power 2022 U.S. Property Claims Satisfaction Study, released Feb. 28, found that “slower cycle times and growing pains associated with transitioning to digital servicing channels caused overall satisfaction scores to say no to a five-year low.”
Though that study is concentrated specifically on homeowners’ insurance, it provides phone causes behind consumers’ dissatisfaction with digital claims processes. Those include the perceived inadequacy of photo estimating tools.
“Insurers really struggled last year, aided by circumstances beyond their control,” Mark Garrett, director, insurance intelligence at J.D. Power, said inside a statement. “Longer cycle times, material shortages and personnel availability put added pressure on insurers to keep customers informed and expectations managed.
“Digital tools were a pivotal part of the process as customers increasingly considered digital channels by submitting photos to assistance with the estimation process and were far more willing to use the tools for status updates. Unfortunately, these digital tools aren't always meeting expectations, leading to support staff needing to become involved. That disconnect creates a major drag on client satisfaction,” Garrett said.
Greater complexity in the claims process contributed to a drop in virtually every insurer’s scores, J.D. Power said. It reported that overall customer satisfaction with homeowner insurance property claims fell to 871 on its 1,000-point scale, a five-year low.
Most claimants weren't making use of the digital tools available, the research said. It reported that just 11% of customers fully utilized digital channels for all major steps from the claim process: digital first notice of loss , digital estimation and mobile apps or web channels for status updates.
A low rate of adoption of digital tools by consumers affected the whole P&C field, including car insurance, J.D. Power reported in the 2022 U.S. Claims Digital Experience Study, released Dec. 7.
“…No most important key performance indicators are achieving even a 50% success rate and adoption remains stubbornly low,” the report states. It discovered that during 2022, just 40% of claimants interacted by having an estimator through a digital channel, and only 47% made a claim through a website.
J.D. Power found that, despite significant investments, the insurance industry had didn't keep up with other industries, such as financial services and utilities providers, in improving its technology.
“At a period when just about any other market is experiencing significant gains in digital customer engagement, the insurance claims process has not really evolved past the launch of digital photo estimation three years ago,” Martin Ellingsworth, executive managing director of P&C insurance intelligence at J.D. Power, said inside a statement.
“It's no secret the continues to be investing heavily in back-end technology such as straight-through processing, which should help set happens for faster, more personalized digital claims management tools. But right now, there is still a great deal of room for improvement in these functions.”
J.D. Power’s findings appear to contradict some analysts’ claims that customers are broadly embracing digital claims processing, including at least one prediction that 80% of claims is going to be handled virtually by 2025.
LexisNexis Risk Solutions, in the 2022 Way forward for Claims study, noted a slight decline in consumer satisfaction with digital claims, “because of expectations according to experiences away from insurance industry.”
Yet it discovered that consumers “have become at ease with virtual and self-service options and understand the benefits they provide.”
Insurers could enhance the process by providing “simple, easy-to-use tools, like calculators and estimators which help customers set realistic expectations and provide information through the process,” Michael Ellison, president of Corporate Insight, said in a statement. Corporate Insight conducted the research in partnership with J.D. Power.
The 2022 U.S. Claims Digital Experience Study issued the next key findings:
- Phones still dominate the estimator phase, dragging down customer satisfaction: Just 40% of claimants communicate with their claim estimator via digital channels, while 49% communicate with their claim estimator via phone. The typical overall client satisfaction score the type of claimants who make use of the phone is 861 , lower than in any other interaction channel. The use of video chat with an estimator is assigned to the highest degree of overall satisfaction , yet it's felt by just 26% of claimants.
- Key satisfaction metrics being missed: Digital claims management tools are hitting their key performance indicators for that estimation process just 35% of times as well as for digital reporting just 40% of times.
- Generational disparities magnified: Members of the Boomer generation are using insurance digital claims tools less and experiencing 'abnormal' amounts of overall satisfaction than are members of Generations Y and Z.
Collision repairers happen to be critical of the insurance industry's change to photo-based estimating and photo estimating artificial intelligence. An April 13, 2022 article in WIRED magazine highlighted discrepancies between photo-based estimates and just what the businesses actually detect.
“Repair shop owners say they're spending for a longer period haggling with insurance providers to look for the correct price for any repair – time that they're not compensated. In some instances, that means damaged vehicles are stuck in the look for longer than usual,” the magazine reported.
