Slower cycle times and growing pains associated with the shift to digital servicing channels have caused customer satisfaction among the country’s property and casualty (P&C) insurers to tumble to a five-year low, the latest property claims survey from J.D. Power has revealed.
The data analytics and consumer intelligence firm interviewed 5,724 home insurance clients who fielded a claim within the nine-month period ending in December 2021 and found that overall satisfaction dropped to 871 (based on a 1,000-point scale) – the lowest since it fell to 860 in 2018.
Almost all insurers’ ratings were dragged down by more complicated claims processes and communications challenges. According to the study, it took an average of 17.8 days for claimants to have their repairs completed during the survey period, up 2.9 days from the same time a year ago.
“Insurers really struggled last year, partly due to circumstances beyond their control,” said Mark Garrett, director of insurance intelligence at J.D. Power. “Longer cycle times, material shortages, and personnel availability put added pressure on insurers to keep customers informed and expectations managed.”
Garrett added that while digital claims showed huge potential, most claimants were not able to maximize the use of online platforms.
“Digital tools were a pivotal part of the process as customers increasingly turned to digital channels by submitting photos to assist in the estimation process and were far more willing to use the tools for status updates,” he said. “Unfortunately, these digital tools are not always meeting expectations, resulting in support staff needing to get involved. That disconnect creates a major drag on customer satisfaction.”
Email gains popularity
The survey period marked the first time a digital channel, namely email, overtook phone calls as the most frequently used communication method. Mobile apps also gained prominence, with usage increasing 19% – the largest of any digital tool.
Despite the rising popularity of online channels, only 11% of customers fully utilize these platforms for all major steps of the claims process – from digital first notice of loss (FNOL) and digital estimation, which includes submitting photos used for the estimate to mobile apps or web channels for status updates.
Based on the survey findings, policyholders who used digital tools throughout the claims process saw their repairs get started nine days sooner and their overall satisfaction scores jump 33 points higher compared to those who did not use online channels.
Read more: Claims tech – a new approach
Clients in ‘hybrid digital limbo’
The report also revealed that many customers found themselves in “hybrid digital limbo”
– starting off the process using digital means but finishing it in person.
While home insurance policyholders who have adopted fully digital channels experience shorter cycle times resulting in higher overall satisfaction, the opposite was true for those who have a partial digital-offline customer experience.
In fact, satisfaction scores were 47 points lower when clients submit photos but still need to arrange for an in-person inspection. Not only does this slow down the process, but those customers were more likely to say the process was more complicated than expected and that they experienced more process touchpoints.
Top 10 US property insurers in terms of customer satisfaction
To determine how property insurers fared in terms of claims experience, J.D. Power analyzed more than 5,700 responses from homeowners’ insurance policyholders based on five indicators – settlement, claims servicing, FNOL, estimation process, and repairs. The scores were then tallied, and the insurance companies were ranked based on a 1,000-point scale.
The latest edition of the survey showed perennial top placers bow out of the top 10, while those in the bottom rung of last year’s rankings burst through. It is important to note that USAA has consistently topped the analytics firm’s annual list, leading the next-placed firm by a substantial distance. The military insurer, however, is not eligible to be included in the rankings “because it does not meet study award criteria,” according to the report. These are the insurers that came out on top in the latest poll.
=1. Amica Mutual
2022 customer satisfaction index rating: 886
2021 customer satisfaction index rating: 894
2021 ranking: 4th
Although the Rhode Island-based mutual insurer’s rating dropped eight points from the previous survey, Amica Mutual moved up the rankings, securing a tie for first place in the latest poll. The firm provides customers self-service tools to guide and assist them through the claim process. These tools can be accessed through the company’s official website and mobile app, or by chatting with a virtual assistant. Among the digital services it offers are document view and uploader, homeowner photo tool, the CCC photo appraisal app, claims messenger, and direct deposit for payments.
=1. The Hartford
2022 customer satisfaction index rating: 886
2021 customer satisfaction index rating: 885
2021 ranking: 7th
The Hartford registered a marginal increase in customer satisfaction, good for a tie for the top spot in the rankings. The Connecticut-based insurer has claims specialists available 24/7 to guide customers through the process. The company also offers additional services to help home insurance policyholders get their lives back on track after making a claim, including access to reliable contractors, property valuation, claim inventory assistance, and a range of emergency services. These features are available for both members and non-members of the American Association of Retired Persons (AARP).
2022 customer satisfaction index rating: 884
2021 customer satisfaction index rating: 884
2021 ranking: 8th
Farmers jumps five spots on the list, while consistently providing good customer experience. To guide policyholders, the California-headquartered insurer lists five claims milestones on its website – assignment, initial contact, evaluation, resolution, and closing – along with what clients should expect at each stage. Customers can also report a claim, find a claims representative, and send relevant documents online.
4. Erie Insurance
2022 customer satisfaction index rating: 882
2021 customer satisfaction index rating: 869
2021 ranking: 17th
One of the few insurers whose scores have climbed, Erie Insurance is this year’s highest riser, bursting through the top five after lagging at the bottom of the list last year. The Pennsylvania-based firm has claims specialists on standby 24/7 to assist customers. Clients can also download the insurer’s home inventory form to help document the details of their claim. Policyholders can likewise create an online account and download Erie’s mobile app, which they can use to view the status of their claims and contact an insurance agent.
Read more: Erie tops J.D. Power satisfaction survey
2022 customer satisfaction index rating: 878
2021 customer satisfaction index rating: 892
2021 ranking: 5th
Ohio-headquartered Nationwide suffered a huge drop in its customer satisfaction rating, but still held on to the fifth spot in the rankings. Policyholders can file a property insurance claim over the phone or online with a specialist on standby ready to help. For repairs, the insurer gives clients the option to work with a contractor from its property repair network or find one that suits their needs.
=6. Liberty Mutual
2022 customer satisfaction index rating: 876
2021 customer satisfaction index rating: 881
2021 ranking: 11th (tied)
Liberty Mutual re-enters the top 10 after bowing out in the previous rankings despite a drop in overall client satisfaction score. Home insurance policyholders can file a claim by calling the Massachusetts-based mutual insurer’s customer hotline or by using their online accounts. For the latter, the process takes less than 10 minutes while offering fast self-service capabilities such as claims tracking and management. Policyholders using the online channel can also file their claims anytime, without having to experience holding or wait times.
=6. State Farm
2022 customer satisfaction index rating: 876
2021 customer satisfaction index rating: 880
2021 ranking: 13th
Another re-entry in the list, State Farm dropped out of the top 10 in last year’s rankings after placing ninth in 2020. The Illinois-headquartered insurer’s customer satisfaction rating is slightly above the industry average. Policyholders can file a home and property claim via the company’s mobile app and website, or by calling their customer hotline number. State Farm will then assign a claims specialist to guide a customer through the process from investigation to settlement.
Read more: State Farm customers get new incentive
8. ASI Progressive
2022 customer satisfaction index rating: 874
2021 customer satisfaction index rating: 879
2021 ranking: 14th
ASI Progressive makes the top 10 for the first time, achieving a customer satisfaction rating just above the industry average. On its website, the Florida-based insurer promises claimants “24/7 emergency service team availability, superior customer service, a multi-state network of expert professionals, both in-house and in-field, and prompt claims handling for a stress-free process.” Clients can file a claim over the phone or through ASI Progressive’s website.
2022 customer satisfaction index rating: 870
2021 customer satisfaction index rating: 882
2021 ranking: 9th (tied)
Allstate stays at ninth place in the list despite its client experience rating falling below the industry average. To ensure claims are handled quickly, the Illinois-headquartered insurer advises clients to create an online account or download the company’s mobile app, where they can track their claim’s progress. Allstate also has a network of repair contractors, which policyholders can choose from. When disaster strikes, Allstate sends a dedicated team on-site to help handle claims.
2022 customer satisfaction index rating: 868
2021 customer satisfaction index rating: 890
2021 ranking: 6th
Wisconsin-based American Family Insurance drops to 10th in the rankings after seeing a 22-point reduction in its customer satisfaction rating – the fifth-largest decline among all companies in the survey. Policyholders can file a claim anytime using the insurer’s mobile app or by logging in on their online account. Clients can also report a claim by contacting American Family’s customer hotline. Apart from the standard fire, theft, and liability claims, homeowners can also file for storm and water damage clean-up.