By Jeff Sanford
Toronto, Ontario — July 21, 2015 — J.D. Power has released the 2015 Canadian Auto Claims Satisfaction study. The findings will be extremely interesting to anyone in the auto claims economy: drivers are significantly less satisfied with their auto insurance claims process in 2015 than in 2014.
The study is based on responses from more than 2,500 auto insurance customers in Canada who settled an auto insurance claim (excluding only glass/windshield damage or stolen vehicles) within the past 12 months. Treatment of drivable claims–when a car is damaged, but still drivable–did live up to the expectations of Canadians, who are increasingly dissatisfied with the auto insurance claims process.
Now in its third year, the study measures customer satisfaction with the claims process – which, depending on the complexity of the claim, can include first notice of loss (FNOL), service interaction, appraisal, repair process, rental experience and settlement – for auto physical damage loss. According to this year’s survey, respondents report that repairs are less likely to be completed when promised in 2015 compared to 2014 – 80 percent versus 83 percent, respectively. Commentary from J.D. Power suggests this underscores the need for “insurers to better manage repair-timing expectations.”
Just 18 percent of claimants with a drivable claim say the claim took a shorter amount of time than expected in 2015, down from 21 percent last year. The authors of the report also claim:
• A 19-point drop in satisfaction with the handling of drivable claims in 2015.
• Claimants satisfaction with FNOL was down by 26 points.
• Settlement was down by 17 points.
In all, 48 percent of claimants with drivable claims in 2015 are first-time claimants, among whom overall satisfaction is lower than among repeat claimants. Overall, satisfaction is down among claimants with drivable, repairable non-tow claims (-19 index points); repairable tow claims (-5 index points); and total loss claims (-12 index points).
In addition, J.D. Power notes the time to receive final settlement payment has increased in 2015 from 2014 – 15.5 days versus 14.2 days. That said, the company reports that more claimants are negotiating their settlements in 2015, up to 17 percent from 13 percent in 2014.
J.D Power reports that the handling of drivable claims, accounting for 62% of all claims, is the primary cause of overall claimant dissatisfaction in 2015. Satisfaction decreased a significant 16 points to 782 (on a 1,000-point scale) in 2015 compared to 2014.
The company emphasizes that ensuring a claimant’s actual settlement is aligned with his or her expectations is the most influential Key Performance Indicator (KPI) impacting the overall claimant experience. But Canadian insurers have considerable ground to make up in the area of effectively managing customer expectations, by effectively explaining the process and providing accurate timeframes for repairs and settlement.
Other survey findings include the following:
• 10 percent of claimants receive a settlement that is not in line with their expectations, and there has been no annual improvement in this top KPI;
• 50 percent of claimants contact local agents/brokers during the FNOL process, but about 20 percent of these claimants are redirected to their insurers by local agents/brokers, negatively impacting satisfaction;
• 80 percent of highly satisfied claimants (overall satisfaction scores of 900 or more) say they “definitely will” renew their policy, and 78 percent say they “definitely will” recommend their current insurer; and
• Only 13 percent of displeased claimants (scores of 549 or less) say they “definitely will” renew their policy and only 4 percent say they “definitely will” recommend their current insurer.
