LexisNexis Risk Solutions: One-Third of a Carrier’s Business Could be at Risk Following the Auto Insurance Claims Experience
LexisNexis® Risk Solutions, a leader in claims data and analytics for the insurance industry, today announced findings from its study examining the link between auto insurance claims and customer experience and retention. The study is comprised of two parts: consumer feedback from more than 1,400 insureds who experienced a claim within the past 12 months, coupled with an analysis of a customer’s propensity to switch auto insurance carriers post-claim. Findings have been published in the whitepaper, Exceeding Expectations or Falling Short? U.S. Auto Insurance Claims Trends, Insights and Impacts Revealed.
“We know consumers leave their insurance carriers following the auto claims experience, and we wanted to look at dissatisfaction from multiple angles to root out its causes,” said Tanner Sheehan, vice president and general manager, U.S. Claims, LexisNexis Risk Solutions. “First, we found that one-third of a carrier’s business is at risk following an auto insurance claim, and then we dove deeper to pinpoint which factors are triggering switching behavior.”
Upon examining the results, LexisNexis Risk Solutions divided respondents into two distinct cohorts – consumers who weren’t planning to leave their insurance carrier, labeled as “Loyalists,” and individuals who indicated they switched or considered switching insurers post-claim, referred to as “Flight Risks” – and then compared their experiences.
“What we found fascinating was that consumers who self-identify as either Satisfied or Somewhat Satisfied with the claims experience don’t necessarily behave that way,” said Sheehan. “That third of your business which could be at-risk does include customers who report some level of satisfaction, which insurers may find counter intuitive.”
Highlights from the research include:
Policyholders with an auto claim switch insurance companies at a rate that is about 35% greater than similar policyholders who have not had a claim.
Flight Risks were four times more likely to experience slow response times after submitting a first notice of loss (FNOL).
Forty percent of Loyalists spoke to one person to settle a claim, whereas only 17% of Flight Risks reported the same experience. In the Flight Risk cohort, 45% spoke to three or more representatives to settle their claim, whereas only 19% of Loyalists did the same.
“When customers speak to multiple adjusters, have to wait on responses or are forced to decipher confusing instructions on a website, customer satisfaction, and by extension loyalty, suffers,” said Sheehan. “Insurers who can better align the claims experience to customer expectations are not only delivering the quick and easy interactions customers seek, but they are also better positioning themselves to retain policyholders.”
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