Filed Under:Markets, Personal Lines

Insurance apps aren’t popular with policyholders yet, finds J.D. Power

When it comes to the first notice of loss after an auto accident, policyholders still prefer to contact their insurers directly instead of filing the claim via an app on their phone. (Photo: iStock)
When it comes to the first notice of loss after an auto accident, policyholders still prefer to contact their insurers directly instead of filing the claim via an app on their phone. (Photo: iStock)

It’s no secret that insurers are making a significant investment in technology.

From apps and drones to software and artificial intelligence, insurers are incubating their own technology or partnering with companies on the forefront of development in multiple disciplines.

And as much as policyholders may want to utilize new technology in various areas of their lives, they’re still not using it to its full capacity in the insurance space.

A new J.D. Power 2017 U.S. Auto Claims Satisfaction Study found that despite a significant advertising and development investment for mobile insurance apps, and the use of digital channels to purchase insurance (think Lemonade and Esurance), consumers have been slower to utilize them when it comes to reporting claims.

Related:  Here's how insurers can solve their 'low-touch' problem

claims adjuster taking a claim over the phone

While customers will purchase their auto insurance online, they still prefer to talk to a claims adjuster over the phone when filing a claim. (Photo: Shutterstock) 

Consumers don’t file claims electronically

The study found that while almost one-quarter (22%) of auto policyholders might begin their communication with an insurer online, only 9% will choose to provide their first notice of loss (FNOL) through an app on their phone or an insurer’s website. An interesting finding given the amount spent to develop and market these technologies.

Related: Underwriting transformation in the digital era

“U.S. auto insurers have invested heavily in technology that will help them gain efficiencies in claims handling, but there are still certain areas of the claims process where the human touch is proving difficult to replace,” explained David Pieffer, J.D. Power’s property & casualty insurance practice lead in a press release. “As insurers continue down this path, it will be critical that communication with their customers is not negatively affected.”

The study found that the decision not to report a claim digitally was not based on age or level of comfort with technology. Only 12% of Gen Y customers were likely to use digital channels to report a claim, a two percent increase over 2016. In addition, the study found that overall satisfaction was 16 points lower (on a 1,000-point scale) for policyholders who used technology to report claims versus those who opened their claim by phone.

policyholder using cell phone

Policyholders who follow the progress of their claim electronically had a higher level of customer satisfaction. (Photo: Shutterstock) 

Digital updates provide more value

The numbers for those who choose to follow the progress of their claim digitally are more promising, with approximately 16% of claimants using mobile apps to upload damage photos and receive status updates. Overall satisfaction was actually 33 points higher for those who selected electronic updates versus those who did not, although much of the usage depends on the age of the policyholder. Gen Y had a satisfaction score 26 points higher than last year, while satisfaction actually dropped among pre-boomers by 16 points.

Claims service matters

Insurers know that customers want their claims serviced and resolved as quickly as possible, because that is a crucial driver of customer satisfaction. This fact was confirmed by the J.D. Power study, which found that 104 points separated the highest and lowest scores.

Related: Customer expectations: 4 digital technology implications for insurers

Amica Mutual scored the highest at 901 for customer satisfaction. Rounding out the top five insurers were: Auto-Owners Insurance (892); Erie Insurance (881); The Hartford (878) and The Hanover (871).

The results of the 2017 U.S. Auto Claims Satisfaction Study are based on the responses from more than 11,000 auto insurance customers who had settled a claim within the six-month period before the survey. Here are the full results of the study:

Graph of J.D. Power Customer Satisfaction scores

Featured Video

Most Recent Videos

Video Library ››

Top Story

How video-enabled services are transforming the insurance industry

Over 70% of insurance professionals will deploy video-enabled services, according to new research from Vidyo and Efma.

Top Story

Identity theft takes the sparkle off of the holiday shopping season says new study

Cyber risks affect shopping patterns, according to Generali Global Assistance.

More Resources

Comments

eNewsletter Sign Up

PropertyCasualty360 Daily eNews

Get P&C insurance news to stay ahead of the competition in one concise format - FREE. Sign Up Now!

Mobile Phone

Advertisement. Closing in 15 seconds.