“If there were only one insight I hope insurers could take away from this year’s report it would be that failing to understand and meet customers’ expectations during a claim can and will have dramatic implications for the bottom line – as dissatisfied claimants are significantly more likely to non-renew their policies, and also tend to spread negative comments among their circle of friends – both off- as well as on-line,” Bowler explains.

 

Measuring claimant satisfaction with the claims experience for auto physical damage loss, the study takes several factors of the customer’s experience into account, including first notice of loss (FNOL), service interaction, appraisal, repair processes, rental experience and settlement. Because each consumer experience is unique, the combination in which these factors occur varies with the individual. 

However, the significance of the final stage in the consumer experience for claimant satisfaction remains fairly consistent. According to consumer opinion, settlement carries the greatest weight in their experience, accounting for 37 percent of satisfaction with the claims process. The impact of the initial stages of the claims experience complements this fact quite well: first notice of lost and service interactions account for 44 percent of claimant satisfaction. 

 

The bottom line? Customer service must be the priority for auto insurers. 

“(So) For insurers it certainly pays to serve the customer well,” Bowler emphasizes. 

To provide auto insurers with a more in depth understanding of their customers’ needs, JD Power and Associates publishes a list of Top 10 Key Performance Indicators (KPIs) with the release of the study. 

 

“To help insurers develop performance improvement plans around the key behaviors that drive satisfaction, we further examine the customer’s recollections of exactly what happened (or didn’t happen) during their claim, and seek to identify the critical steps that most influence customers’ perceptions of what represents good quality,” Bowler says. 

 

Many of the KPIs revolve around efficient and effective communication and expectation management. Returning calls, answering questions at the FNOL, providing flexible appraisal appointments and limiting out-of-pocket expenses were some of the more influential KPIs.  

“Ongoing communication and managing expectations are key not only during the FNOL, but also throughout the entire claims process, as claimants should never be left with unanswered questions or uncertainty about the next steps in the claims process,” concludes the management discussion that is based on the study. 

 

To deliver better customer service, improve customer satisfaction and increase retention, insurers are recommended three areas to focus their attention on: communication, speed and fairness. 

 

However, buyer beware: it is important for customers themselves to ensure that they have a clear understanding of their policy and the claims process. 

 

“From the consumer perspective, the takeaway would be to read and make sure you understand your insurance policy.  Many purchase based on price but don’t fully comprehend the terms of the contract and whether it will fully meet their needs in the event of a claim,” explains Bowler. 

 

As the policy holder, it is important for the customer to be knowledgeable about the terms of their policy in the event that they are involved in an accident. Dealing with a collision can be stressful enough without having to pore over your policy, possibly misunderstanding or misinterpreting key information when you can least afford to. Communication between insurer and customer is more easily achieved when both are on the same page.

 

“Communication is a two-way street, consumers will receive a better claim experience if they too establish their expectations up-front with their insurer’s claims team, rather than leaving it up to chance,” Bowler insists.

 

Familiarizing yourself with your insurance policy is even more critical if you fall within the under-35 crowd. Referred to as the “Gen Y insurance customer”, this segment of consumers tends to be less knowledgeable about their policy and the process and more critical of the handling of their claim. 

 

“The Gen Y insurance customer is indeed much more critical of what they perceive to be overly complicated or tardy service.  They are also much more likely to tell their acquaintances about shoddy service,” Bowler explains. 

 

He adds that the major driving force behind low Gen Y satisfaction scores is their lack of experience with the process. 

“(That said,) A biggest driver of their lower satisfaction scores stems form the fact that they’re far more likely to have never previously filed an Auto Physical Damage claim (50 percent of Gen Y have no prior claims experience compared to only 21 percent of Boomers).  They therefore have a lot more questions and often don’t even know what questions to ask.”

 

Bowler is confident that a greater understanding of claims policies and processes will come with maturity and experience. By extension, their overall satisfaction with the claims process should increase. 

 

In order to meet this generation’s expectations, however, Bowler reminds both insurers and collision repair experts alike that they must cater to this consumer by addressing their unique expectations when it comes to communication. 

 

“(However) Having grown up in the Internet age, they will continue to exhibit fundamentally different communication habits and preferences – something every insurance company and body shop will have to address in the months and years to come.”