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Insurers up their digital game for rate shoppers

Insurers up their digital game for rate shoppers | Insurance Business America

However, the industry is lagging when it comes to servicing existing customers, study reveals

Stiff rate hikes in the property and casualty insurance sector have spurred a record volume of customers to seek new quotes and switch carriers.

While insurers have done a good job of addressing those shoppers’ needs through digital channels, they’re lagging in servicing existing customers digitally, according to a new study from J.D. Power.

The study follows another survey from the company that showed a similar increase in shopping among auto insurance customers.

“The industry is seeing historic levels of customer churn right now, which puts a spotlight on the critical role insurer digital channels play in not just attracting new customers, but also onboarding them, and in retaining existing customers,” said Stephen Crewdson, senior director of insurance business intelligence at J.D. Power. “When it comes to shopping, insurers are starting to get the formula right – but they are still lagging far behind the best-in-class offerings in other industries like banking and airlines when it comes to servicing existing customers. That needs to become a focal point if insurers really want to build lifetime customer value.”

J.D. Power’s US Insurance Digital Experience Study evaluated the digital consumer experiences of both shoppers seeking quotes and existing customers conducting typical policy-servicing activities. It evaluated the functional aspects of desktop, mobile web and mobile apps based on four factors: ease of navigation, speed, visual appeal, and information/content.

The study was conducted in collaboration with Corporate Insight, a provider of corporate intelligence and user experience research.

“The last thing most insurance companies want to do is have to call their carrier for help with basic account-servicing questions and actions,” said Michael Ellison, president of Corporate Insight. “Increasingly, the usability and accessibility of a carrier’s digital solutions plays a big role in both attracting new customers and retaining existing ones.”

Key findings of the study include:

  • Shopping experience improved, but there’s still a long way to go on digital: Overall customer satisfaction with the digital shopping experience for P&C insurers is only 521 on a 1,000-point scale. That’s up 22 points from last year, but compared to satisfaction scores with digital shopping tools in other industries such as banks and airlines, the insurance sector has a long way to go.
  • Digital service satisfaction falls: Overall customer satisfaction with the digital service experience was 702, a three-point drop from last year. Satisfaction scores were lowest when customers couldn’t find information on an insurer’s website and had to call the insurer – which happened 42% of the time, the survey reported.
  • Wide variation in app performance: The study found significant gaps in mobile app performance when it came to account servicing. The average satisfaction score among the top-performing 25% of customers using a mobile app was 872 – significantly higher than other channels. However, satisfaction among the bottom 25% was only 567.
  • Traditional carriers beat insurtechs on digital service and shopping: Overall customer satisfaction with both digital account servicing and shopping was slightly higher for traditional insurers than insurtech brands. While insurtechs did better on the “research policy information” metric, traditional carriers performed as well or better in all other metrics.

Study rankings

Amica ranked highest in the service segment with a score of 735, followed by GEICO (731) and Progressive (722).

American Family took the top spot in the shopping segment with a score of 549, followed by Farmers (548) and AAA (543).

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