Auto Insurance Repair Cycle Times Improve but Price Increases Take a Toll, J.D. Power Finds
Auto insurers have been fighting two major headwinds ever since the pandemic: rising costs and longer repair cycle times. This year, according to the
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“The claims process is the moment of truth for auto insurance customers, so when they experience rate increases and then have a claim with longer-than-expected repair times and other inconveniences, their overall trust in the brand is greatly diminished,” said
Following are some key findings of the 2024 study:
- Relief for repair cycle times: The overall average repair cycle time in this year’s study is 22.3 days, down 1.0 day from the 2023 study. However, when results are broken out into the quarter in which the claim was filed, cycle times have improved steadily since peaking in early 2023, for a total 5.0-day reduction throughout fielding of the 2024 study.
- Premium increases following claims crush customer satisfaction: Overall, 48% of study respondents experienced a premium increase during the past 12 months. Satisfaction is particularly low among those who incurred increases prior to their claim, and these customers may have been entering the claim process already upset by rising prices. The study shows that these customers were more likely to have an issue—such as communication with the insurer not being very easy or timing expectations not being managed—and thus they didn’t feel more at ease after submitting their claim. Furthermore, nearly half of those increases were attributable to claims. Compared with those customers who did not have an increase, satisfaction scores fall more than 100 points (on a 1,000-point scale) following a claim-related rate increase. This negative effect is most pronounced among Boomers1 and Pre-Boomers, with a 178-point decrease in trust following a claim-related rate increase.
- Digital claims processing drives satisfaction but not for all customers: Insurers have been focused on improving mobile apps and the outcome appears to be paying off. For the past three years, claims filed via call centers or agents outperformed digital channels, but now digital is receiving higher scores with mobile apps achieving the highest scores. In addition, satisfaction is higher among those who stay in the app to submit photos and receive status updates (775) than for all other digital experiences. However, this group comprises only 13% of customers. Boomers and Pre-Boomers are still hesitant to adopt fully digital processes, with 32% stating they disagree with being comfortable using digital tools for the entire claim. Customers also rate digital channels lower than speaking with someone if they have a specific question. Thus, generational differences and the types of tasks being performed are still affecting digital experiences.
- Good communication is key to satisfying claim experience: The No. 1 key performance indicator in the study is to ensure that communicating with insurer reps is very easy. Being accessible; responding in a timely fashion; reps providing consistent service; managing timing expectations; and providing options for proactive updates are all critical elements of communication throughout a claim. This is another area in which digital tools play a key role in customers’ ability to access information and stay informed.
Study Ranking
The
For more information about the
https://www.jdpower.com/resource/jd-power-us-auto-claims-satisfaction-study.
See the online press release at http://www.jdpower.com/pr-id/2024133.
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