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Letter to the Editor

Satisfying Customers

J.D. Power study of auto insurance customers after claims shows need for speed, updates, and follow-up.

J.D. Power and Associates’ recent insurance industry customer satisfaction study was developed in conjunction with auto insurers, but the resulting data offers some items of interest no matter which segment of the collision industry you represent. A few examples:

• Vehicle owners who used a shop of their choice were significantly more satisfied with their overall claims experience than those who chose a shop based an insurer recommendation or list.
• The choice and explanation of the type of parts used in the repair of the vehicle has a significant impact on customer satisfaction.
• Average cycle time (from first notice of loss to completion of vehicle repairs) by insurer varied by more than five days.
• Only about one-third of customers felt they received proactive updates on the claim/ repair, and only about half said they were contacted after the claims process – which has a significant impact on their overall satisfaction).

  As a company that has long tracked customer satisfaction trends within the collision industry, INSIGHT this month offers this examination of these and other findings of the J.D. Powers auto claims consumer study.

  Crunching the numbers

  First, the background on the study itself. J.D. Power and Associates has been measuring consumer satisfaction with insurers since 2000, but this was only the second year in which one of its studies focused specifically on auto insurance claims.

  Though the survey was developed in collaboration with a number of companies (including insurers), the list of consumer surveyed did not come from insurers, according to Jeremy Bowler, senior director of J.D. Power and Associates’ “insurance practice.” Rather, J.D. Power contacted 200,000 people in order to find 11,700 who said last July and August that they had filed an auto insurance claim within the preceding 12 months.

  Bowler said the survey data includes both repairable and total loss claims, but excludes claims that were only glass damage, vehicle thefts and bodily injury.

  Consumers were asked what insurer was involved, and J.D. Power attempted to get data from about the same number of consumers for each insurer (an average of about 450 claims per insurer).

  Bowler said that, overall, insurers (and others involved in auto claims) should feel pretty good about the findings.

  “The auto insurance customer who has a collision repair claim tends to be very satisfied,” Bowler said. “It is a very satisfying process, especially when one considers how much upset or turmoil it may present to the average person to have an accident and have to go through a claims process, something that typically happens very infrequently to the average person.”

  Across all insurers, the industry scored an average CSI of 818 on a scale of 1 to 1,000, Bowler said, or the equivalent of about 8.2 out of 10.

  “This is an exemplary result for an industry, and ranks among the very highest industry averages for the 80 or so studies that J.D. Power and Associates conducts each year across many product and service categories,” Bowler said. “All but the lowest ranking carriers were at least 8 out of 10 for automotive claims, which is a very, very strong result.”

  However, Bowler noted, “a marked variance between the very highest rated companies, such as Auto-Owners, Amica, State Farm and The Hartford, versus those who received some of the lower average scores,” such as included Mercury, AIG, Safeco, MetLife and Hanover.

  That difference, he said, cannot be explained fully by business model. Look at any of the three tiers of overall CSI – high, medium or low – and you’ll see in each insurers that sell directly (Amica), that sell through captive agents (State Farm) and that sell through independent agents (Auto-Owners, a regional insurer in the Midwest). Among both the above-average and below-average are insurers that use staff-overseen direct repair programs, those that primarily use independent adjusters, and those that use concierge-type claims processes.

  So if those key business model differences can produce both high and low CSI overall, what is it that actually drives customer satisfaction with auto claims handling?

  Getting into details

  Part of Mark Garrett’s job as a senior research manager with J.D. Power and Associates is to drill down and help companies understand what separates those with high CSI in an industry. Here is some of what he sees in the data from auto insurance claims customers.

  Customers like to use the shop of their choice.

  The 53 percent who used a shop they had had in mind had an overall claims satisfaction level of 835 (on the 1,000-point scale) versus 787 for the 40 percent of customers who chose an insurer-recommended shop. Garrett cautioned that the findings do not necessarily compare DRP to non-DRP satisfaction because sometimes the shop a customer wanted to use was a participant in insurer’s DRP. “But customers who ultimately use a shop they had in mind are clearly more satisfied with the experience there,” Garrett said.

  Customers link insurers to the repair if the insurer recommended the shop.

  Among vehicle owners who said they used a shop of their choice, only 4 percent viewed the insurer as having a role in their satisfaction with the repair experience and the quality of the work. That number jumps to 20 percent of consumers who chose a shop based on an insurer list or recommendation. “That’s a pretty sizable shift, where one in five customers using the DRP shop actually think the insurer now is assuming some role in getting their vehicle fixed, getting a quality repair job and having it returned to them,” Garrett said. That percentage doubles to between 40 and 50 percent among customers using a “concierge-type” program such as Progressive’s or the GEICO “Auto Repair Xpress” program, under which, Garrett said, nearly half of consumers “really view the insurer owning that repair process because they’re now inserting themselves into this process.”

  Customers want vehicles repaired quickly – or at least when promised.

  Most of the insurers in the bottom half of the overall claims satisfaction chart also had longer-than-average cycle times (as measured from first notice of loss to completion of repairs). For drivable vehicles, customer satisfaction drops off significantly if repairs take more than a week (855 points if one week or less, 773 points if 8-14 days, 684 points if more than two weeks). For towed vehicle, there is a big drop in satisfaction if repairs exceed two weeks. Garrett said the one in 10 customers who get their car back sooner than promised are the most satisfied (894 points out of 1,000). About two-thirds get their vehicle back on time and are also highly satisfied (858). But one in four are either given no time frame (4 percent) or the promised date is missed (21 percent) and their satisfaction scores are much lower (712 and 646 points, respectively).

  Customers want updates on the repair process.

  “We asked: Did the customer ever need to initiate any contact with the body shop,” Garrett said. “Did they have to make calls to find out what was going on during the repair process, or were they being kept informed? We see some companies perform a lot better (at updating customers) than others. Over half the time at top companies they are doing that. On the low end, it only happens about one-third of the time. So there’s a lot of room for improvement here.” Customers who felt they didn’t have to initiate contact had a satisfaction rating of 876; those who said they had to call at least once for updates had a satisfaction level of 774, a significant drop, Garrett said.

  Customers want to be contacted after the claim.

  Just over half of customers in the survey said neither the shop nor insurer followed up with them after they got their repaired vehicle back, and their satisfaction levels were 100 points lower than those who said they had heard back from the shop or insurer.

  Garrett said well over 80 percent of customers are experiencing what J.D. Power believes leads to a satisfied claims experience, including: having all their questions answered; having a non-negotiated settlement cover what they expected it would cover; feeling genuine concern (from the shop and insurer) about their situation; having their calls returned; and being offered flexible appointment times.

  But only about two-thirds of customers report getting proactive updates during the process, and being made to feel at ease with the whole process including getting an accurate expectation about how long the process will take and having that expectation met.

  “When a company can deliver on all these services practices – and that’s happening about one-third of the time across the whole industry – we see satisfaction is over 900 points, so 9 out of 10 on a 10-point scale,” Garrett said, adding that the retention among those customers is significantly higher.   o

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