US Insurers Manage Customer Expectations As Repair Cycle Times Double In Two Years

US Insurers Manage Customer Expectations As Repair Cycle Times Double in Two Years

J.D. Power’s 2023 US Auto Claims Satisfaction Study has found that repair shop backlogs and lingering parts shortages caused the average vehicle insurance repair cycle time to reach 23.1 days in 2023, up 6.2 days from 2022 and more than double the average repair time in 2021. The pre-pandemic average cycle time was 12 days.

Despite the longer delays, the study showed that customer satisfaction with the claims process improved because of efforts by insurers to carefully manage customer expectations.

“It’s really a testament to strong client management processes and improved digital communications,” said Mark Garrett, Director of Global Insurance Intelligence at J.D. Power. “Insurers have been able to earn significantly higher auto claim satisfaction scores at a time when costs and rates are rising, even though it’s never taken longer to get a vehicle repaired. Notable, too, is that insurers that have improved the most in overall satisfaction have done so in two key customer areas – showing concern for their situation at the beginning of the process and keeping them informed. Being empathetic toward the customer situation goes a long way in building trust with them.”

Overall satisfaction with the claims process increased by five points this year (on a 1,000-point scale) to 878. The company said the increase was driven by improvements in nearly every factor, including settlement, first notice of loss (FNOL), claim servicing, estimation process, and repair process. The rental experience was the only factor to decline, falling two points.

An increasing percentage of customers said their rental period is not long enough or that they are incurring out-of-pocket expenses, adversely affecting rental car satisfaction. Overall rental satisfaction for repairable claims fell 32 points when the car is needed for 15 days or more.

Digital interactions are also driving an improvement in satisfaction, but mainly among those who prefer digital channels. However, satisfaction declines among customers who prefer more personal interactions but are directed to digital processes. J.D. Power said that aligning processes to preferences is key as customers increasingly want personal interactions, resulting in increased satisfaction.

Nearly one quarter (24 per cent) of claimants are using digital FNOL methods to report a claim, with 13 per cent using an insurer’s mobile app and 10 per cent using the insurer’s website.

The 2023 US Auto Claims Satisfaction Study is based on responses from 9,659 vehicle insurance customers who settled a claim within the past nine months prior to participating in the survey. The study excludes claimants whose vehicle incurred only glass / windscreen damage or was stolen, or who only filed a roadside assistance claim. The study was conducted from September 2022 to August 2023.