Research reveals a decrease in digital P&C claims, favoring the preference for human interaction
The P&C industry invested heavily in digital tools with the intention of cutting costs, settling claims quickly, and maximizing customer satisfaction. However, due to inflationary pressures as well as supply chain disruptions caused by the pandemic, policyholders have become skeptical of these digital solutions and are increasingly favoring direct one-on-one interactions with their insurers.
An eye-opening survey from J.D. Power discovered a vast surge in policyholders consulting their insurer for guidance, while digital claims reporting usage has unexpectedly dropped for the first time in history.
Despite the $700 billion property and casualty industry investing a whopping $8 billion in digital transformation over just 18 months, research has found that only 40% of claimants had positive experiences.
According to the recently released J.D. Power 2023 U.S Property Claims Satisfaction StudySM, 2022 was an incredibly challenging year financially for homeowners’ insurance providers because of increasing severity in events, expenses, and longer processing times— all of which have severely impaired customer satisfaction and tested the capabilities of digital tools meant to facilitate quicker resolutions and more efficient outcomes.
Digital technology cannot provide personalized support
Navigating the claims process can be daunting without a human representative to provide assurance and guidance. People often feel overwhelmed when they are struggling with delays, yet need reassurance that their issue will eventually be resolved. Digital alone simply cannot offer this level of support and understanding.
The 2023 study yielded some significant discoveries, including:
Repairs are taking longer to finish than before: Claim resolution time has been extended by four days since the previous year, and a full week longer than what was reported in the 2021 survey. On average, it now takes 22 days from claim reporting to completion of repairs.
The performance of insurance companies is inconsistent: The industry has improved by 3 points on the 1,000-point scale. However, out of the 17 ranked insurers, 8 declined in customer satisfaction while 9 showed progress year over year. Those that experienced significant improvements have been able to restrict their customers from having to contact them for information– which is an essential distinction between brands with higher or lower scores.
Proactively managing client expectations is paramount: While repair cycles of three weeks or longer can make customers feel dissatisfied, insurers can ameliorate customer satisfaction during lengthier and more intricate repairs by taking a couple of simple steps, including:
• Providing different ways for customers to stay informed about their repair status
• Establishing accurate estimates for claim duration
• Curbing customer requests for information
• Ensuring swift customer service is accessible
Pushing digital options on customers that prefer a call puts an undue burden on customer satisfaction: Customers who prefer to communicate with their insurer via more traditional channels, such as phone or in-person meetings, often report lower levels of satisfaction if they’re forced to use digital platforms for key parts of the claim process.
According to the research conducted, Erie Insurance ranked first regarding property insurance claims experience with a remarkable score of 912. Following suit was Amica in second place, scoring 903, and Nationwide trailing behind at 884.