Insurers that keep homeowners apprised of the claims process from start to finish are faring well in terms of meeting—and even exceeding—their customers' expectations. Or so it seems, according to the results of J.D. Power's 2014 Property Claims Satisfaction Study.

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

A thorough explanation of coverage when initially reporting 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 claimants informed of their claim, the estimate of damages, the settlement amount, when work will begin and when it will be completed,” says Jeremy Bowler, senior director of the insurance practice at J.D. Power.

High Achievers

Setting the gold standard once again for property insurers everywhere is Amica Mutual, which scored 898 on the 1,000-point scale used to measure customer satisfaction. The insurer placed first for the third year running. Trailing behind Amica Mutual, Erie Insurance scored 877, followed by Nationwide (858), Auto-Owners Insurance (854) and Farmers (845). The full list of satisfaction rankings can be found on the last page of this article.

Of course, any number of circumstances can lead to a property claim, from a water pipe rupturing to a powerful storm system sweeping through a community. Just as each cause of insured loss is unique, so too are the causes for customer dissatisfaction. Generally speaking, catastrophe losses garner lower marks in customer satistaction when compared to non-catastrophe claims. The claims-handling challenges created by Superstorm Sandy have been well-documented, for example.

Sandy's Ongoing Impact

While it has been more than 16 months since Sandy struck, ripples are still being felt throughout the P&C insurance industry. This is quite evident in feedback from property owners surveyed by J.D. Power. After analyzing more than 5,500 responses from those who filed a property claim between April 2012 and January 2014, J.D. Power found that homeowners who filed for damage caused by Sandy were somewhat less impressed with their insurers.

Property claim satisfaction averages just 830 (based on the 1,000 point scale) in 2014, down from 846 among Sandy-related claimants surveyed shortly after the storm. Overall, however, satisfaction among homeowners insurance customers who filed a property claim between April 2012 and January 2014 averages 840, up from 836 in the 2013 study.

"When major storms hit and insurers have to rely on third parties to assist in managing the large number of claims, service levels often deteriorate fast as each insurer has their own processes and approval requirements," Bowler explains. "This can sometimes lead to significantly extended claim cycle times.”

Key Findings

When conducting the 2014 study, J.D. Power found that 15 percent of all claims reported involved a third-party damage 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-catastrophic claims increased by 11 index points in 2014, compared with 2013 (843 compared to 832, respectively).
Overall satisfaction improves in four of the five factors year over year, while satisfaction with FNOL remains the same as in 2013. The greatest increase in satisfaction is in the settlement factor (+4 points).
When insurers effectively communicate with claimants, those claimants are less likely to escalate the claim to a supervisor. When a supervisor becomes involved, overall customer satisfaction drops by more than 160 index points.
Timeliness of the communication also plays a role in whether or not a claim gets escalated. For example, if the settlement terms are provided to the claimant within one day of first notice of loss, only 6 percent of customers escalate the claim. The rate of escalation increases to 13 percent if the claimant is informed within one week and increases to 18 percent if it takes more than one week.
Nearly one-fourth (23%) of Gen Y claimants escalate their claim to a supervisor, compared with just 8 percent of Boomers.

The study, now in its seventh 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; FNOL; estimation process; service interaction; and the repair process.

Special Reports /

J.D. Power: Property Claims Satisfaction Climbs for Second Straight Year

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