J.D. Powers latest survey takes a look at U.S. Property Claim Satisfaction Rates
Following on the heels of its first independent agent satisfaction study, J.D. Powers has released its annual study on the state of U.S property claims satisfaction levels. The annual study quantifies customer satisfaction levels with the property claims experience by analyzing 6,572 responses from various homeowners insurance customers between January and November 2017. The responses are then reviewed for the following five factors, in order of importance:
- Settlement;
- Claim servicing;
- First notice of loss;
- Estimation process; and
- Repair process
According to this year’s edition, the biggest take-away from the J.D. Power 2018 U.S. Property Claims Satisfaction Study, is that overall customer satisfaction has reached a new all-time high, despite the various catastrophes and record-high property losses that have occurred around the country in the past couple of years.
“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 from the study
- Record-high customer satisfaction: Customer satisfaction achieved an all-time high of 860 (on a 1,000-point scale) even in the face of a record number of claims within the personal lines segment. According to the study, this is the second year in a row that property claims satisfaction levels are in line with auto claims satisfaction scores, which have historically always been higher. The study also notes that the bulk of this year’s improvement is driven by non-weather-related claims, primarily related to water damage.
- Time expectations are still key to satisfaction levels: The time it takes to settle a claim is not the highest, but the single lowest-rated attribute in the study. Generally, survey respondents noted that a claim took much longer than expected to settle. When time frames are properly managed, however, the study noted that 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). It is crucial that insurers stay on schedule with respect to the claim settlement process as the study noted “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 hardest hit have lowest customer satisfaction: Unsurprisingly, perhaps, those areas hardest hit by weather events in recent years logged declining customer satisfaction rates, particularly in the immediate aftermath of a storm.
- Insurers need to incorporate outsourcing: Insurers failure to effectively incorporate independent appraisers into the claim process workflow has resulted in lower customer satisfaction scores. As many customers use independent appraisers, particularly after a large catastrophic event, insurers need to incorporate these appraisers in order to improve the claim experience attributes with respect to time-to-settle, status notifications on a claim as well as a thorough explanation of the final settlement amount.
Amica takes the top spot again in this year’s survey
According to this year’s results, Rhode Island-based Amica Mutual ranks the highest in property insurance claims experience. This is the seventh year in a row that Amica has taken the top spot. In second place is Chubb, which ranked second with a score of 887. Third place went to Erie Insurance with a score of 884. The following is the complete list of top insurers for 2018:
