During two consecutive years of staggering claims settlements originating from natural catastrophes, P&C insurers nevertheless earned high marks in overall customer satisfaction, according to the findings of J.D. Power and Associates’ “2013 Property Claims Satisfaction Study.”

By and large, the industry fared well in terms of meeting customer expectations in the wake of more frequent—and costly—disasters, but several insurers shined a little brighter, at least in the eyes of survey respondents: Amica Mutual, USAA, and Chubb Insurance scored 907, 904 and 902 respectively on a 1,000-point scale, well above the reported industry average of 832 in 2013. Down just one point from 2012, this year's score nevertheless shows a noticeable improvement from 823 in 2011 and 818 in 2010, no doubt owing to more efficient claims handling and enhanced disaster response.

“Overall, the industry achieved a comparable level of performance to last year even though 11 separate one billion-dollar-plus insured loss events occurred in 2013, most notably Superstorm Sandy,” explains Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates.

The study, now in its sixth year, measures satisfaction with the property claims experience among insurance customers who filed a claim for damages covered under their homeowners’ policy by examining five factors: settlement; first notice of loss (FNOL); estimation process; service interaction; and repair process. The 2013 iteration is based on more than 5,500 responses from homeowners' insurance customers who filed a property claim between May 2011 and January 2013.

Conflicting Perceptions: Irene v. Sandy Claimants

Both Amica Mutual and Chubb Insurance performed well in all five areas. Aside from star performers, J.D. Power and Associates made several interesting observations in this year's survey, from customer perceptions of the settlement process to the role of a positive interaction at FNOL in bolstering satisfaction and good will. Specifically, Bowler alluded to key differences between Irene and Sandy claims. Although Sandy generated far greater losses—in excess of $25 billion—settlements were generally quicker.

“Sandy claims satisfaction ratings were comparable to the kinds of results [we saw] for Hurricane Irene; however, we found marked differences between these two storms from the customer’s experience,” Bowler says. "The average settlement amount is up nearly $500 this year. Normally we’d expect that more severe, expensive claims would take longer and consequently get lower ratings. However, this year’s results show that, on average, the customer received the settlement payment 4 days faster."

“As a result, the Sandy claimants rated the experience very favorably,” he continues. “Settlement is the biggest driver in customers’ experience, accounting for 41 percent of what informs their overall assessment of the claim, whereas FNOL accounts for further 25 percent of index score.”

In keeping with Bowler's points, the average settlement amount for 2013 is $8,517, up from $7,937 in 2012. While the amount of the settlement to cover contents increases by nearly $250 year over year, the amount to cover the cost of repairs increases to $7,844 in 2013 from $7,151 in 2012, with the average out-of-pocket expenses paid by homeowners nearly doubling to $3,888 in 2013 from $1,945 in 2012.

FNOL: Shift Toward Direct Channels

Despite the overwhelmingly positive implications of the 2013 study findings, insurers will need to foster more nurturing FNOL interactions to keep customers happy over the long haul. More customers are filing claims via direct channels (online or a call center), thereby removing the agent, with whom they have rapport, from the process. According to the study, 68 percent of customers now file homeowners' claims via these direct channels, up from just 57 percent in 2012.

"This represents a challenge for the industry because we find that agents, on average, tend to do a better job of putting the customer at ease when they report their loss," Bowler says. "Seventy-two percent of customers who reported a loss to an agent in 2013 said the agent did a good job of putting them at ease, versus only 56 percent for those who reported the loss directly to the insurer."

"During times of hardship when someone's house has been destroyed or their valuable possessions have been lost, it is difficult for a call center representative to replicate the personal relationship customers get with an agent," he continues. "As the shift towards direct channels continues, call center representatives must be fully trained to provide the claims experience customers have come to expect."

Bowler adds that high customer satisfaction can be achieved through call centers, citing direct providers, including Amica Mutual, this year's highest-ranked insurer.

Special Reports /

J.D. Power: Property Claims Satisfaction Holds Steady Despite Record Cats

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