Overall customer satisfaction among homeowners filing property insurance claims has reached a new all-time high, despite record-high property losses in 2017 following a spate of hurricanes, earthquakes and fires in North America.
That’s according to the J.D. Power 2018 U.S. Property Claims Satisfaction Study, released Feb. 22, which finds that insurers that have achieved the highest levels of customer satisfaction have also been the most effective at managing customer expectations for the time it will take to settle claims.
“The last two years of record catastrophic losses have put P&C insurers to the test, and many have risen to the occasion, driving overall customer satisfaction levels to new highs,” said David Pieffer, Property & Casualty Insurance Practice Lead at J.D. Power. “While that overall performance is a positive for the industry, there is wide variability in the ranges of performance among insurers in different regions of the country and between different service attributes. Particularly noteworthy, customer satisfaction in Texas and Florida — two of the areas hardest hit by hurricanes — show below-average results, spotlighting areas where there is still room for improvement among insurers.”
Key findings of the 2018 study:
- Overall customer satisfaction reaches record high: Overall satisfaction for property claims has reached an all-time high of 860 (on a 1,000-point scale) at the same time the personal lines segment has experienced record claims. This is the second consecutive year that property claims satisfaction levels are in line with auto claims satisfaction scores, which had historically trended higher. The bulk of this year’s improvement is driven by non-weather-related claims, primarily related to water damage.
- Managing time expectations becomes key driver of satisfaction: The time it took to settle a claim is the single lowest-rated attribute in the study, with 1 in 7 respondents indicating that the claim took longer than expected. However, when time frames are properly managed, even groups that experience the longest time-to-settlement still rate their experience above the industry average of 8.45 (on a 10-point scale). Time-to-settle satisfaction ratings are 1.9 points lower when insurers miss customer timing expectations, even when the time frame is relatively short.
- Areas hit hardest by weather events show declining satisfaction: Texas and Florida show declining customer satisfaction scores in the immediate aftermath of major weather events. In both cases, the time required to estimate the damages is particularly affected. Claims related to hail storms in Texas, and high winds or storms in Florida, see this time nearly double to 10 days compared with five days for claims in these states not related to weather.
- Outsourcing takes a toll: The use of independent appraisers, which typically spikes when large catastrophic events occur, is associated with significantly lower customer satisfaction scores. However, interactions with the appraisers are not driving the lower scores; rather, insurance companies are not effectively incorporating appraisers into the claim process workflow as customers are most critical of key claim experience attributes such as time-to-settle; kept informed on claim; and thorough explanation of settlement.
Amica Mutual ranks highest in property insurance claims experience for a seventh consecutive year, achieving a score of 895. Chubb ranks second with a score of 887, followed by Erie Insurance with a score of 884.
The U.S. Property Claims Satisfaction Study measures satisfaction with the property claims experience among insurance customers who have filed a claim for damages by examining five factors (listed in order of importance): settlement; claim servicing; first notice of loss; estimation process; and repair process. It is based on 6,572 responses from homeowners’ insurance customers and was fielded between January and November 2017.
For more information about the U.S. Property Claims Satisfaction Study, visit http://www.jdpower.com/resource/us-property-claims-satisfaction-study.