Insurers that keep homeowners apprised of the claimsprocess from start to finish are faring well in terms ofmeeting—and even exceeding—their customers' expectations. Or so itseems, according to the results of J.D. Power's 2014 PropertyClaims Satisfaction Study.

For the second consecutive year, J.D. Power found a steadyswell in overall satisfaction ratings among propertyclaimants. The firm attributes the uptick insatisfaction, in large part, to consistent communication withproperty claimants, beginning at first notice of loss (FNOL).Compared with 2013, the findings released today suggestthat homeowners who filed a non-catastrophic claim in the pastyear often received:

• A thorough explanation of coverage when initiallyreporting a loss.
• Prompt notification of what damages were covered.
• Settlement nearly 4 days faster.

“Starting at the time of first notice of loss,it is crucial for insurers to keep claimantsinformed of their claim, the estimate of damages, thesettlement amount, when work will begin and when it will becompleted,” says Jeremy Bowler, senior director of theinsurance practice at J.D. Power.

High Achievers

Setting the gold standard once again for property insurerseverywhere is Amica Mutual, which scored898 on the 1,000-point scale used to measure customersatisfaction. The insurer placed first for the third yearrunning. Trailing behind Amica Mutual, ErieInsurance scored 877, followed byNationwide (858), Auto-Owners Insurance (854) andFarmers (845). The full list of satisfaction rankings can be foundon the last page of this article.

Of course, any number of circumstances can leadto a property claim, from a water pipe rupturing to apowerful storm system sweeping through a community. Justas each cause of insured loss is unique, so too arethe causes for customer dissatisfaction. Generally speaking,catastrophe losses garner lower marks in customersatistaction when compared to non-catastrophe claims. Theclaims-handling challenges created by Superstorm Sandyhave been well-documented, for example.

Sandy's Ongoing Impact

While it has been more than 16 monthssince Sandy struck, ripples are still beingfelt throughout the P&C insurance industry. This isquite evident in feedback from property owners surveyed byJ.D. Power. After analyzing more than 5,500 responses from thosewho filed a property claim between April 2012 and January 2014,J.D. Power found that homeowners who filed for damage causedby Sandy were somewhat less impressed with theirinsurers.

Property claim satisfaction averages just 830 (based on the1,000 point scale) in 2014, down from 846 among Sandy-relatedclaimants surveyed shortly after the storm. Overall, however,satisfaction among homeowners insurance customers who filed aproperty claim between April 2012 and January 2014 averages 840, upfrom 836 in the 2013 study.

"When major storms hit and insurers have to rely on thirdparties to assist in managing the large number of claims, servicelevels often deteriorate fast as each insurer has their ownprocesses and approval requirements," Bowler explains. "This cansometimes lead to significantly extended claim cycletimes.”

Key Findings

When conducting the 2014 study, J.D. Power foundthat 15 percent of all claims reported involved a third-partydamage inspection, down 5 percentage points from the 2013 study.Below is an overview of some of J.D. Power's key findings:

• Overall satisfaction with non-catastrophicclaims increased by 11 index points in 2014, compared with2013 (843 compared to 832, respectively).
• Overall satisfaction improves in four of the five factors yearover year, while satisfaction with FNOL remains the same as in2013. The greatest increase in satisfaction is in the settlementfactor (+4 points).
• When insurers effectively communicate with claimants, thoseclaimants are less likely to escalate the claim to a supervisor.When a supervisor becomes involved, overall customer satisfactiondrops by more than 160 index points.
• Timeliness of the communication also plays arole in whether or not a claim gets escalated. For example, ifthe settlement terms are provided to the claimant within one day offirst notice of loss, only 6 percent of customers escalate theclaim. The rate of escalation increases to 13 percent if theclaimant is informed within one week and increases to 18 percent ifit takes more than one week.
• Nearly one-fourth (23%) of Gen Y claimants escalatetheir claim to a supervisor, compared with just 8 percentof Boomers.

The study, now in its seventh year, measuressatisfaction with the property claims experience among insurancecustomers who filed a claim for damages covered under theirhomeowners’ policy by examining five factors: settlement; FNOL;estimation process; service interaction; and the repairprocess.