LexisNexis: ‘Somewhat Satisfied’ Auto Claimants Often a Flight Risk for Insurers

An auto claims experience that leaves the policyholder “somewhat satisfied” may not be good enough to keep that customer from switching insurers.

A survey conducted by LexisNexis Risk Solutions found that 51% of policyholders who reported shopping for insurance after filing a claim said they were somewhat satisfied or dissatisfied with their claim experience. In contrast, only 24% of policyholders who said the were very satisfied with the claims experience shopped for other insurance or switched carriers.

The survey found that 33% of claimants shopped for insurance or switched carriers because of their claim experience. A separate analysis of insurer data found that policyholders that filed claims were 35% more likely to consider switching insurers than policyholders that did not file claims.

“One third can translate into hundreds of millions of dollars in premiums,” said Tanner Sheehan, LexisNexis’ vice president of US Claims. “Those are dollars walking out the door.”

LexisNexis used an independent contractor to gather data about the claim experience by interviewing 1,409 insurance customers who had filed an auto claim in the previous 12 months. The data on customers who made a switch came from a review of 16.5 million insurance policies with a claim and 150 million policies without a claim. The findings were reported in a white paper released on Wednesday.

Sheehan said one fascinating finding from the research is that customers who reported some level of satisfaction with the claim experience didn’t necessarily behave like happy customers. LexisNexis divided respondents to the survey of auto claimants into two groups: “Loyalists” who did not shop for insurance or switch carriers after filing a claim and “flight risks” who did.

Even though 94% of respondents reported some level of satisfaction, the flight risk respondents rated individual components of the claims process differently than loyalists.

• Loyalists said they were very satisfied with the adjuster’s professionalism 57% more often than flight risks.
• Loyalists were very satisfied with the adjuster’s accuracy 74% more often than flight risks.
• Loyalists were very satisfied with the availability of the adjuster 65% more often than flight risks.

Drilling into the data further, the researchers asked claimants how they used self-service options offered by their insurance carriers. Flight risks more often than loyalists used more than one method of self-service to submit a first notice of loss:

• 25% of flight risks used an app, compared to 21% of loyalists.
• 16% used web chat, compared to 7% of loyalists.
• 22% used a web form, compared to 17% of loyalists.
• 15% used text messaging, compared to 5% of loyalists.

Only half of the flight risks reported that the self-service options were “very easy,” compared to three quarters of the loyalists. Similarly, 60% of flight risks rated the document submission process as very easy, while 80% of loyalists did.

Sheehan said a key takeaway for insurers is that customers expect smooth “omnichannel’ options to report claims. They are happy to use digital options when its easy, but want human assistance for anything that’s complicated.

Empathy is also important. “People still need a person to tell their story to,” Sheehan said.

The white paper is available for download here.