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Auto Insurance Holders Are Resisting Mobile Apps

by Precise Leads

November 9, 2017

A recent survey from J.D. Power indicates policyholders are still reluctant to submit claims via a digital app.

In recent years, traditional insurers and insurtech startups have invested heavily in mobile apps that enable policyholders to purchase policies and report claims with a few taps of a screen. Despite these efforts, however, a recent survey from J.D. Power revealed that a majority of auto insurance owners are reluctant to use digital apps, at least when submitting claims.

According to the “2017 U.S. Auto Claims Satisfaction Study,” 22% of auto insurance customers initially engage with carriers online, but a mere 9% file a first notice of loss (FNOL) online or through an app. Surprisingly, even millennials have resisted submitting claims with apps, with only 12% of millennials accessing a mobile app to provide a FNOL.

Mixed Results on Customer Satisfaction

In terms of customer satisfaction, the J.D. Power survey uncovered mixed results. Customer satisfaction among auto insurance owners using a mobile app for FNOL came in 16 points lower (on a 1,000-point scale) than policyholders who report a first loss notice over the phone.

Nevertheless, auto insurance customers appreciated some aspects of mobile claims processing, particularly the ability to receive online status updates and receive digital appraisals after uploading photos of damages — even though only 16% of claimants used a mobile app for those features. For those who checked status updates via an app, overall satisfaction scores were 33 points higher than auto insurance customers who didn’t do so.

Satisfaction with digital appraisal apps split among age groups, with Millennials grading the feature 26 points above the overall score. In contrast, pre-boomers rated digital appraisal apps 16 points lower.

For the more than 11,800 auto insurance owners who submitted a major claim within six months of participating in the survey, satisfaction with servicing claims was the decisive factor behind the overall score. The 104 point disparity between the survey’s highest and lowest ranked insurers suggests that some insurers are struggling to meet their clients’ expectations.

Still Need a Human Touch

In an effort to contain expenses at a time of rising claim costs, auto insurers have turned to technology, but as David Pieffer, Property & Casualty Insurance Practice Lead at J.D. Power, said in detailing the survey results, “there are still certain areas of the claims process where the human touch is proving difficult to replace.” The lack of app usage might also be due to policyholders not knowing they’re available, or auto customers may find the apps difficult to navigate as the decrease in customer satisfaction with FNOL implies.

As the survey indicates, auto insurers and their agents cannot rely solely on technology when communicating with clients. They need to know when to reach out to their clients to expedite claims, and to be there to help when clients contact them.

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