Insurance Claims Satisfaction on the Rise
Consumer satisfaction with insurance carriers throughout the auto insurance claims process rose to an all-time high during the fourth quarter of 2012, which analysts say is a good thing for collision repair shops.
In January, J.D. Power & Associates release_notesd its 2013 U.S. Auto Claims Satisfaction Study-Wave 1, a report measuring claimant satisfaction with insurance carriers that cover more than 80 percent of the market. The report showed that claimant satisfaction with the auto claims process increased to 861 on a 1,000-point scale during the fourth quarter of 2012. That’s a six-point increase compared with the same time period in 2011.
That improvement was primarily the result of an 11-point increase in consumer settlement satisfaction, which includes fairness and timing of the claim settlement. The average time period to pay claimants for repairable and total loss claims decreased to 13.9 days during the fourth quarter of 2012 compared with 16.4 days in 2011. The average time to pay claimants for repairable claims specifically was 11.8 days during the fourth quarter of 2012, a 1.3-day reduction from 2011.
Mark Garrett, research director for J.D. Power & Associates’ insurance practice, says insurance carrier satisfaction improvements are largely due to the industry’s focus on new technologies for streamlined processes. Many companies have invested in technology solutions that allow for more accurate vehicle assessments, timely communication and better payment processing, which leads to a more efficient method for settling claims. That’s good for collision repairers.
Dusty Dunkle is the president of Seahurst, Wash.–based Customer Research Inc., a company that provides customer satisfaction and research services to the collision repair industry. He says there is a big correlation between consumer satisfaction with the insurance claims process and satisfaction with repair shops.
“When [consumers] are dissatisfied with the insurance claims process, the shop CSI suffers,” Dunkle says. “I’ve seen many statistics over the years proving this correlation is strong.”
Garrett agrees. When insurers are able to make payments faster on repairable claims, that means the repair process can begin more quickly and payment for work performed can be received sooner.
In addition, when insurers drop the ball and make the claims experience a hassle, shops can be the ones that bear the brunt of the blame, Garrett says. But when insurers perform strongly, consumers tend to be less critical and harsh on the repair experience.
According to the study, overall consumer satisfaction with the repair process only dropped two points on the 1,000-point scale—from 864 in 2011 to 862 in 2012—despite declines in the speed and quality of repairs.
Average cycle time was 13.5 days during the fourth quarter of 2012, a 1.2-day increase compared to 12.3 days in 2011, and only 89 percent of vehicles were repaired correctly the first time in 2012, down from 91 percent in 2011.
Although consumers are more forgiving with repair shops when insurers perform well, that doesn’t mean repairers can ignore those key performance indicators (KPIs). Insurers are still highly focused on cycle time, communication and quality performance of shops.
Garrett says there are a few key areas revealed by J.D. Power’s study where shops could improve:
Repair Quality. Repairers need to fix vehicles correctly the first time. “That’s a critical metric, and the number one area where shops must deliver and perform,” Garrett says.
Communication. Customers must be kept informed regarding the status of repairs and notified of any issues or changes in the repair process immediately, Garrett says. Customer contact should occur regularly; customers become frustrated when they’re the ones who have to initiate communication.
Maintain Promises. Repairs must be completed in the timeframe communicated to the customer. Process improvements should be made to eliminate as many delays as possible.