Overall customer satisfaction with the property claims experience remains stable and high, even as insurers handled the two worst years of disaster claims settlements in 2011 and 2012, a new study shows.
Independent agency carriers that rank above the industry average for claims satisfaction include Chubb and Encompass, which were topped only by direct writer Amica Mutual, according to the J.D. Power and Associates 2013 Property Claims Satisfaction Study, which is based on responses from more than 5,500 homeowners insurance policyholders who filed a property claim between May 2011 and January 2013.
The study’s claim-filing timespan includes October 2012’s Superstorm Sandy, which so far is the third-costliest U.S. hurricane, based on preliminary figures as of January. In the study, tornadoes and hurricanes were the reason for one-third of claims, followed by hail, 22%, and water damage not caused by weather, 14%.
Overall customer satisfaction rose to 832 on a 1,000-point scale, according to the study, which examines five factors: settlement, first notice of loss, estimation process, service interaction and repair process. It decreased by one point from the 2012 rating, but jumped from 823 in 2011 and 818 in 2010.
Mark Garrett, director of industry analytics for J.D. Power’s insurance practice, attributes the industry’s high and stable results to customers adjusting their expectations and insurers applying lessons learned from previous disasters.
With Superstorm Sandy causing widespread, devastating losses and knocking out power to millions, consumers recognized that the claims process would take some time, he says.
“Essentially, they adjust their expectations and aren’t as critical of their insurance carrier,” he adds.
In addition, insurers improved the efficiency of their claims process, including with company representatives handling first-notice-of-loss calls from consumers, Garrett says. Insurers have also sent payments to policyholders more quickly for Sandy than they did for August 2011’s Hurricane Irene, which is the 12th most-expensive U.S. hurricane.
“That’s helping to kind of ‘wow’ the consumer,” he says. Policyholders are “changing their expectations because of the widespread damage, and then suddenly they’re getting paid faster.”
Still, the satisfaction rate was 50 points higher for customers who filed a claim through an agent, compared to those who filed directly with an insurer, according to the study. Nearly three-fourths of policyholders who filed through an agent say the agent helped to put them at ease, while only 56% of those who filed directly with an insurer say the company representative did the same.
But despite a greater level of satisfaction for submitting a claim through an agent, consumers are increasingly filing claims directly with an insurer online or by calling a call center, according to the study. It found that 68% of policyholders filed a claim directly, up from 57% in 2012.
Some agency carriers are encouraging that policyholders report claims directly—especially in high-volume catastrophe situations—while others prefer for agents to be involved, Garrett says.
Consumers “are just a little more skeptical reporting it directly,” he adds. “Agents have a huge advantage of just using their rapport that they have with their customer.”
Victoria Goff is IA online editor.