Property and Casualty (P&C) insurance has encountered several obstacles on the road to the industry’s digital transformation, a recent study by J.D. Power found.
According to the 2022 U.S. Claims Digital Experience Study, overall satisfaction with the digital claims process has declined for a second consecutive year as insurers struggle to manage longer cycle times via digital channels.
Mark Garrett, director of P&C insurance intelligence at J.D. Power, said: “P&C insurers are facing a host of challenges that include rising repair costs as well as supply chain disruptions and shop backlog issues that are driving notably longer cycle times.
“Longer claims create more of a need to manage customer expectations and to keep those customers informed. Digital customer engagement should be part of the solution, one that supports proactive, multi-channel engagement and regular updates with customers.
He added: “But many customers are facing clunky interfaces, infrequent updates and frustrating workflows that force them to pick up the phone and chase down information. The good news is that leading carriers have begun to crack the code on digital and they are rapidly establishing a set of best practices that could pave the way for industry-wide improvements.”
The U.S. Claims Digital Experience Study evaluates digital experiences among P&C insurance customers throughout the claims process. It examines the functional aspects of desktop, mobile web and mobile apps based on four factors: visual appeal; clarity of the information; navigation; and range of services.
It is conducted in collaboration with Corporate Insight, the leading provider of competitive intelligence and user experience research to the financial services and healthcare industries.
This year’s study, fielded from June through September 2022, is based on 2,890 evaluations by auto or home insurance customers who filed a claim in the past 12 months.
As mentioned above, one of the key findings of this study was the decline of overall customer satisfaction with the digital claims experience. Other key findings include the challenges created by digital estimation, as insurers are meeting customer expectations just 34% of the time.
According to J.D. Power, usually, customer experience with the estimation process is the most notable driver of digital satisfaction, and if done well, it can add high satisfaction scores.
The study also found that overall satisfaction with the claims process is higher among customers who use digital first notice of loss (FNOL) tools – whereby they notify their insurer of a claim via the insurer’s website or mobile app – compared with satisfaction among customers who report a claim via an insurer’s call centre.
However, there has been low adoption as, among digitally engaged customers, only 41% are using the website or app to initially report a claim.
Finally, the study found that managing expectations via digital is critical. Customers are three times more likely to say the claims process was slower than expected when regular updates are not provided via digital channels.
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