J.D. Power Reports: Overall Property Claims Satisfaction Remains Stable Despite Lower Satisfaction with More Complex Superstorm Sandy Claims
WESTLAKE VILLAGE, Calif., Aug. 22, 2013 /PRNewswire/ -- Although customer satisfaction with the handling of Superstorm Sandy property claims declines substantially, overall satisfaction with the property claims experience remains stable, according to the J.D. Power 2014 Property Claims Satisfaction Study(SM)—Wave 1 released today.
The study, which for the first time is being conducted on a quarterly basis, is based on responses from 2,517 homeowners insurance customers who filed a property claim after April 1, 2012. The current wave of the study was fielded in the second quarter of 2013. This information follows the previous reporting period, the 2013 study that published in March, covering claims that were filed between July 2011 and December 2012.
The study measures satisfaction with the property claims experience among insurance customers who filed a claim for damages covered under their homeowners policy by examining five factors: settlement; first notice of loss; estimation process; service interaction; and repair process.
Overall claimant satisfaction with the handling of Superstorm Sandy property claims has declined substantially by 20 points to 826 (on a 1,000-point scale), compared with 846 in the previous period. However, despite the 20-point decline, overall satisfaction with all property claims during the current wave of the study remains stable at 832.
The severity of property damage, settlement amount and length of claim payment processing for Superstorm Sandy has increased in the current wave, compared with the previous period. The average settlement amount for property claims increased to $10,205 from $5,517 in the previous period. An increase in the number of claims related to damage to the exterior of the house (71% vs. 65%) contributes to the higher settlement figures.
"Since we wait until the conclusion of each claim to survey the customer, the complexity of the Superstorm Sandy claims in this wave has increased from the last reporting period," said Jeremy Bowler, senior director of the insurance practice at J.D. Power. "Property claims related to Superstorm Sandy were primarily for items damaged in the yard, and the settlement process was expedient. The current wave study findings include more complex Superstorm Sandy property claims being processed for the structure of the home."
Bowler noted that settling a claim for structural damage tends to take significantly more time due to the scope of the claim. The longer claimants must wait for settlement, the less satisfied they are with their claims experience.
These more complex Superstorm Sandy claims captured in this wave took much longer to settle than the Sandy claims captured in the previous period, and all of the timing metrics related to claims handling have increased. The most significant changes are an increase of nearly 10 days in the time it takes to inform claimants about the settlement terms (19.6 days after reporting claim), and an increase in the number of days until the initial payment is received by the claimant to 25 days from 14.1 days.
"Providing an accurate estimate of how long it will take to settle a claim is very important in managing the claims experience," said Bowler. "When estimates to settle are extended and claims become drawn out, the possibility that insurers will not return claimants' calls increases, as does the likelihood claimants will be required to repeat information, both of which contribute to a decline in claims experience satisfaction."
With the timing of key milestones in the claims process taking significantly longer for Superstorm Sandy claims, performance in several key performance indicators (KPIs) has also declined substantially. Returning all promised calls is down by 10 percentage points to 82 percent; avoiding having claimants repeat information is down by 12 percentage points to 61 percent; and providing an accurate claims length estimate is down by 5 percentage points to 69 percent.
About J.D. Power
J.D. Power is a global marketing information services company providing performance improvement, social media and customer satisfaction insights and solutions. The company's quality and satisfaction measurements are based on responses from millions of consumers annually. Headquartered in Westlake Village, Calif., J.D. Power has offices in North/South America, Europe and Asia Pacific. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power is a business unit of McGraw Hill Financial.
About McGraw Hill Financial
McGraw Hill Financial (NYSE: MHFI) is a leading financial intelligence company providing the global capital and commodity markets with independent benchmarks, credit ratings, portfolio and enterprise risk solutions, and analytics. The Company's iconic brands include: Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL, J.D. Power, and McGraw Hill Construction. The Company has approximately 17,000 employees in 27 countries. Additional information is available at www.mhfi.com
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SOURCE J.D. Power