Survey: Faster Payments Boost Insurance Claims Satisfaction

Though policyholders have been facing a longer wait for car repairs, a shortened period for claims payment has boosted their overall satisfaction levels, according to the latest study from J.D. Power and Associates based on last year’s fourth quarter.

Overall, the 3,000 auto policyholders surveyed showed satisfaction levels of 861 on a scale of 1,000, signifying a six-point increase compared with the same quarter in 2011. The biggest driver of that increase was an 11-point boost in policyholders’ satisfaction with their settlements.

The study, conducted regularly throughout the year, measures satisfaction with car insurance carriers by evaluating six major stages of the insurance claims process:

–The initial loss notice
–Customer service for claims
–Appraisal of damage
–The repair process
–Experience with car rentals
–The settlement process

Formerly a Weakness, Customer Service is Improving

One of the more notable findings was that satisfaction levels with customer service and “claims professionals” hit an all-time high.

“The [claims] process is becoming smoother, with more frequent updates throughout contributing to a much more satisfying experience,” Jeremy Bowler, a J.D. Power senior director, said in a statement.

Previous studies from the firm tagged customer service as an “Achilles heel” for the industry but the latest findings show improvement in the industry, according to Mark Garrett, a research director at J.D. Power.

“We’ve heard conversations before about that being a hard metric to move because the adjustor, who is the first point of contact in bad news, is obviously going to be rated poorly,” Garrett said in an interview with Online Auto Insurance News. “But while we used to see more adjustors who were former car salesmen or industry types, the industry is doing a better job of developing soft skills and training employees on customer service.”

Though customer service is still one of the lowest-rated factors that drags down overall satisfaction, its improvements over time can be credited to responsiveness, according to Garrett.

“There’s just more communication happening with the policyholder,” he said. “It helps them feel like they’re getting a fair shake out of it.”

Claimants Are Paid Quicker, More Satisfied

Respondents were more satisfied with the settlement process because they are getting settlements quicker, according to the survey, which found that the average settlement period for claims fell by 2.5 days between the fourth quarter of 2011 and 2012.

In the latest report, the time it took to pay an insurance claimant was 13.9 days on average compared with last year, when it was 16.4 days.

“Regardless of the claim type, the faster the claimant is paid and can move forward with a repair or to replace their vehicle, the more likely they are to be satisfied,” Bowler said.

The biggest decrease in payment periods was for total-loss claims, which dropped by an average of 5.1 days. The average total-loss payment was made in 18.5 days for the fourth quarter of 2012.

The payment period for repairable claims fell by an average of 1.3 days to come in at 11.8 days overall.

The “fairness” of settlements also played a part in respondents’ being more satisfied with the overall settlement process, according to the survey.

Happiness with settlements was also important to higher overall satisfaction levels reported in J.D. Power’s 2012 survey on insurance claims satisfaction that was released last October. In that report, based on survey responses collected between November 2011 and September 2012, the overall satisfaction score was 852. The latest report, the first released in 2013, was based on survey responses collected in December 2012.

In fact, while settlements have long been the largest driver of insurance claims satisfaction, its role in the overall happiness of policyholders is still growing, according to Garrett.

“I think that part of why settlements are still getting more important would be that the economic conditions over the last couple of years,” he said.

The tough economic climate also reverberates through other findings in the study as money-minded consumers lower their satisfaction levels whenever they have to open their wallets, according to Garrett.

“It’s a huge driver of dissatisfaction, if I have to spend money,” he said. “We’ve seen that when customers rate rental car experiences they’ll say, ‘What is this about, I have to pay for that too with my coverage?’ It’s all those surprises that really hurt overall satisfaction with the claims experience.”

Cars Staying in Repair Shops Longer

The report also found that current satisfaction levels with the repair process is lower compared with the same quarter in 2011, dragged down by longer repair times and an increase in the percentage of drivers who have to make repeat visits to the body shop.

Between the fourth quarters of 2011 and 2012, there was a two-point decrease in overall satisfaction with the repair process for insurance claims.

The repair process increased an average of 1.2 days between those two time periods and currently sits at 13.5 days, according to the report.

There was nearly a three-day difference when comparing auto insurance repair periods for claims at direct and non-direct repairers. Direct repairers, which are affiliated with insurers through body-shop networks, take an average of 13.1 days to complete repairs, compared with 16 days for non-direct repairers who are outside of such insurance networks.

Despite the gap, Garrett said, smaller regional car insurance providers that lack direct repairer networks typically dull the impact of longer repair times by focusing on customer service.

“We found that managing a customer’s expectations is very important and some of the repairers that can’t lean on direct repairers like GEICO get away with longer waits for repairs because they execute customer service so well,” he said.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for Patch.com and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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