J.D. Power: Pandemic gave auto insurers "breathing room" to refine customer experience

A new study by J.D. Power found that auto insurance customer satisfaction actually improved this year, despite the pandemic – and it is thanks to insurers using the lull caused by the coronavirus to work on their customer experience and service.

“The sharp decline in claims volume during the pandemic has served as a test case for the industry in how to make improvements in service delivery that translates directly to increased satisfaction and increased intent to renew,” explained J.D. Power head of property and casualty insurance intelligence Tom Super. “This is important because it demonstrates that efforts to improve claimant service delivery translates directly to improved business outcomes.”

Super added that even with the high satisfaction levels, the challenge for auto insurers now “will be maintaining that high level of service as claims volumes start to normalize.”

The J.D. Power 2020 U.S. Auto Claims Satisfaction Study made the following key findings:

• Record-high customer satisfaction with auto claims – Overall satisfaction with the auto insurance claims process increased to a record-high 872 (on a 1,000-point scale), up four points from 2019; J.D. Power noted that this is also the third straight year of improvement in auto claims satisfaction. However, the only factor that has not improved year over year is first notice of loss, which remained flat from 2019.
• Cycle time improves as claims volume slows. Auto insurers have taken advantage of the drop in frequency to increase claims processing speeds. Overall cycle time for claimants improved to 10.3 days during the pandemic, down from pre-virus average of 12.6 days.
• Marked improvement of current auto insurance customer satisfaction compared to pre-virus levels – Because J.D. Power’s study was fielded in four waves, from November 2019 through September 2020, the firm was able to compare customer satisfaction levels before and during the pandemic. Of note, the number of claimants who say they “definitely will” renew with their existing insurer is 76% during the pandemic vs. 72% pre-virus. J.D. Power found that carriers have outperformed on a range of key performance indicators during the pandemic.
• Use of direct repair program shops improves satisfaction – The insurance industry’s increasing use of DRP shops has led to a significantly higher overall satisfaction score (888) than for independent repair shops (844).

Read more: NJM receives J.D. Power Auto Claims Certification for third straight year

In terms of individual insurance companies and the satisfaction levels among their own customers, J.D. Power ranked NJM Insurance as the company with the highest overall customer satisfaction levels, with a score of 909 out of 1,000. NJM is followed by Amica Mutual with 907, and Auto-Owners Insurance at 890.