Insurance company investments in their mobile apps such as automatic collision reporting capabilities, enhanced image upload, and body shop selection tools have resulted in significantly higher customer satisfaction scores, according to J.D. Power’s 2024 U.S. Claims Digital Experience Study.

The study, now in its fifth year, evaluates digital experiences among P&C insurance customers throughout the claims process by examining the functional aspects of desktop, mobile web, and mobile apps based on visual appeal, clarity of the information, navigation, and range of services.

Overall, satisfaction with the digital insurance claims process is currently 871 on a 1,000-point scale, up 17 points compared to 2023, driven largely by improvements in the range of services offered on mobile apps and websites and the visual appeal of those digital properties, J.D. Power said.

“The digital channel has now surpassed traditional phone-based communication as the most satisfying way for insurance customers to submit a new claim,” said Mark Garrett, J.D. Power’s director of global insurance intelligence, in a press release.

“After years of slow growth in the usage of digital channels for claims reporting, insurers’ investments into developing these tools and promoting usage have really paid off as more insureds than ever are using them. Auto and home insurers have finally gotten the digital formula right with streamlined reporting tools, proactive updates, and well-designed apps. However, the industry still has some work to do when it comes to helping insureds navigate between digital and offline channels, which can sometimes create unnecessary friction in the claims process.”

Customer satisfaction scores are highest when insurer mobile apps are used to report a claim, submit photos and/or videos, and receive updates from the insurer.

“Property and casualty insurers made an average of 6.75 updates to their mobile apps in 2023, an increase from 5.72 in 2022, many of which augmented the resources provided to policyholders throughout the claims process,” said Michael Ellison, president of Corporate Insight, in the release.

The study is conducted in collaboration with Corporate Insight, a competitive intelligence and user experience research firm.

“The industry is reaching an important tipping point in which digital channels — particularly mobile apps — are the primary conduit to insurance customer engagement. This is particularly important as younger generations tend to be mobile-first,” Ellison said. “As technology improves, insurers can leverage mobile apps to offer a powerful customer experience at a pivotal juncture in the insurer-insured relationship.”

Twenty-one changes were made to the claims functionality on insurance mobile apps during 2023, nearly double those in 2022.

While 84% of claimants said their insurer provides an easy digital communication process, 39% said their insurer always responds in a timely fashion to emails and text messages, according to the study.

Nearly 20% of customers said they used more than one channel when they had a question — a frustration point that reduces satisfaction by more than 100 points, according to J.D. Power. Among those who used more than one channel for the same topic, the most frequently cited were email, apps, and phone calls.

The 2024 study was based on 2,982 evaluations provided by auto or home insurance customers who filed a claim in the past 12 months. The study was fielded from May-September 2024.

In October, J.D. Power reported that while the overall average repair cycle time was down one day compared to 2023, repair costs have gone in the opposite direction. The average rose 26% in the past two years, and premiums followed suit rising 15% during the past year, according to J.D. Power.

The study found that customer satisfaction was particularly low among those who incurred increases before their claims, and those customers may have been entering the claim process already upset by rising prices.

“The claims process is the moment of truth for auto insurance customers, so when they experience rate increases and then have a claim with longer-than-expected repair times and other inconveniences, their overall trust in the brand is greatly diminished,” said Mark Garrett, J.D. Power’s director of global insurance intelligence, in a press release.

J.D. Power’s latest Loyalty Indicator & Shopping Trends (LIST) report states that Q2 saw a record high as consumers sought out lower premiums.

Q3 started with a steep drop in shopping in July but increased in both August and September reaching a record high of 13.8% in the latter.

“Overall, this led to a slight drop in the quarterly rate but with shopping accelerating on a monthly basis, Q4 could break with trend and show elevated shopping for auto insurance,” J.D. Power said in the report.

Shoppers were evidently able to find better premiums in Q3 based on the switch rate increasing to 4.2% during that time, setting a new quarterly high in the LIST data series, according to the report.

In November, LexisNexis reported that, for the second consecutive quarter, levels of auto insurance shopping and new policy volumes were “nuclear.”

New policy volumes also set a new record for growth since LexisNexis first began tracking U.S. insurance consumer shopping behavior more than a decade ago.

Marketing by insurance companies caused consumers looking for better rates to “respond in droves.” By the end of the quarter, 45% of U.S. policies-in-force had been shopped at least once in the past 12 months. LexisNexis attributes this to “the continued escalation of activity the market has witnessed over the past two quarters.”

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