Insurers Grapple with Achieving a Seamless Digital Experience

A recent study by J.D. Power reveals that despite the increasing importance of digital channels for customer satisfaction, many insurers are facing challenges in delivering a seamless digital experience to their customers.

According to the study, customers report that the average auto repair cycle time has doubled over the past two years, now surpassing 23 days. Additionally, the average time for home repairs is also increasing. In light of these trends, the study emphasizes the need for insurers to exert more effort in managing customer expectations. The findings underscore the growing significance of digital experiences in the insurance industry and the necessity for insurers to enhance their digital capabilities to meet customer demands.

Despite the increasing importance of seamless digital experiences, the study indicates a decline in overall customer satisfaction to 854 on a 1,000-point scale, a three-point drop from 2022. Many insurers are still facing challenges in delivering satisfactory digital interactions.

Mark Garrett, Director of Global Insurance Intelligence at J.D. Power, emphasizes the impact of managing expectations on customer satisfaction. He notes that even when repair cycle times are extended, satisfied customers often result from effective communication, updates, and ease in managing the claims process.

However, the study highlights that only 41% of customers "completely agree" that their expectations were met, indicating a gap in meeting digital tool efficiency expectations. Additionally, only 35% of customers found the estimation process to be "very easy," suggesting room for improvement in the overall digital claims experience.

The study highlights that positive digital experiences can significantly boost customer satisfaction. J.D. Power notes that digital communications, including personalized text messages, status updates through mobile apps, and guides for understanding estimates, can enhance the overall customer experience without substantially increasing service costs for insurers.

However, the study also points out that many customers still find it necessary to contact insurers via phone to obtain status updates, leading to a potential negative impact on the overall customer experience. The reliance on traditional communication methods can result in inefficiencies, including the need to repeat information to a representative, emphasizing the importance of improving and expanding digital communication channels in the insurance claims process.

The study, now in its fourth year, focused on evaluating digital experiences among P&C insurance customers throughout the claims process. It examined the functional aspects of desktop, mobile web, and mobile apps, considering visual appeal, clarity of information, navigation, and the range of services provided.

Key findings from the study include:

Post-Digital Update Contact:

One-third of claimants indicated the need to contact their insurer after receiving a digital update.

Customer satisfaction with the digital claims experience was highest when claimants received an email, text, or mobile app update that addressed all their questions.

However, 33% of respondents reported contacting their insurer with additional questions, resulting in a significant drop of 78 points in overall satisfaction.

Ease of Processes and Policy Renewal Intentions:

Satisfaction was notably higher among customers who found claim reporting, estimation, and settlement processes "very easy," with a satisfaction score of 948.

In contrast, those who did not find these processes easy reported a satisfaction score of 799, and only 41% indicated an intention to renew their policy.

Complete Digital Experience:

While most respondents acknowledged that their insurer's digital tools provided at least one element of a complete digital experience, only 35% believed their insurer met the standard on three criteria: creating an efficient claims process, keeping customers informed, and reducing time spent on the phone.

Repeated Photo and Information Submission:

Customer satisfaction was highest (875) among respondents who only needed to submit photos of their damaged property once.

The satisfaction score dropped to 837 for those who had to submit twice and further decreased to 806 for those who had to submit three times or more.

These findings underscore the importance of a seamless and efficient digital claims experience, with particular emphasis on reducing the need for post-digital communication and simplifying processes such as photo and information submission. Insurers that successfully provide a comprehensive digital experience demonstrate higher customer satisfaction and increased likelihood of policy renewals.