Insurers punished for intervention in digital claims: J.D. Power

During the COVID-19 era, insurance companies rapidly proliferated digitalized processes across their enterprises as social distancing became the norm. But growing pains have crept in.

That’s what J.D. Power found in its 2022 U.S. Property Claims Satisfaction study, which surveyed more than 5,700 homeowner’s insurance customers who filed a claim between April and December last year. Cycle times got longer, repair materials were short and workforce shortages increased pressure on the insurance industry. Satisfaction dropped to a five-year low.

With every claim taking place well into the COVID era, the results indicate where the insurance industry should coordinate its efforts to elevate its experiences, says Mark Garrett, director of insurance intelligence at J.D. Power.

[MORE DIGITAL CLAIMS COVERAGE FROM DIGITAL INSURANCE]

“Everybody went to digital everywhere — there was a giant push toward all digital,” he explains. “Insurance kind of lags the digital processes of other industries, which helped raise the bar [for expectations]. Customers have an expectation that digital is going to gain efficiencies. Move things along at lightning speeds — I’m in this digital platform, it’s clicks on buttons and it’s done.”

A category of interaction that drew customers’ ire in particular was when they submitted photos or other documentation digitally, then still had to schedule — and wait for — an in-person inspection. While the 34% of customers who reported that happening was about the same as previous years, this year a customer was far more likely to be dissatisfied as a result.

“If I’m using a digital platform, then you completely negate everything I just did by saying, ‘now I would need to come schedule an appointment…’ It’s like, why did I take all these photos, I just went through all that effort,” he says.

Bridging this gap is going to require a multi-pronged approach from insurers, Garrett says. Customers will have to be better prepared and educated on expectations. Digital services will have to be improved from the current baseline. And carriers will have to reinforce their staffing levels.

“COVID impacted that so much people, I think, had to rush some tools to market. Usage rates shot up. I don’t think everyone was ready for the whole skill influx of that — staff availability paid a big, big role here,” he says. “[Customers] are waiting a week for somebody to get back — we certainly heard that a lot. But If I submit something there’s almost this implied quick turnaround here.”