Disaster claims in the West create stress for home insurers, proactive interactions can improve customer satisfaction: J.D. Power

A recent study from JD Power discovered an increase in significant claims resulting from destructive disasters in Canada in recent years has posed a serious challenge for insurers in 2017, a condition that has severely affected the satisfaction of customers while filing for claims.

The insurance practice director at JD Power, Valerie Monet explained that the resources of insurers have been experiencing enormous strain as a result of the level of disaster claims that are higher than what has been seen in the past in western Canada and in the previous weeks in Quebec which has affected everything such as the cycle payment for longer-than-average claims and the increase of annual premiums required by customers.

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The 2017 Canadian Home Insurance research carried out at the beginning of the year and distributed on Monday showed about 7,422 responses from customers of home insurance provides an advisory solution, consumer insights as well as data and analytics.

The level of customer satisfaction estimated on a 1,000 point scale with their home insurance company depends on five elements (in order of priority)

Non-claim communication (put broker or local agent under consideration, call the customer service or website)

  • Policy offerings
  • Price
  • Payment and billing
  • Claims

Regional insurers in Western Canada. The site of the most expensive natural disaster in Canada, the wildfire of Fort McMurray experienced the largest hit on the satisfaction of customers during the claims process. The annual study of JD Power revealed that a 10-point decrement in customer satisfaction was experienced which moved from 806 in 2016 to 796 in 2017.

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However, considering the entire relationship that exists between insurers and customers, claims only represent a small fraction of the total customer satisfaction as the claims are not usually filed by all the customers.

Since that is the case, the statement indicated that even though customer satisfaction from claims for regional insurers is on the decline due to the high volume of claims in the West, there is a 37-point increase in the entire customer satisfaction.

The main driver behind this is the improvement of non-claims communications through the online services of insurers, customer service agents, and the local broker/agent.

Monet stated that although most regional insurers felt the impact of the unexpected rise in claims, few industry leaders have discovered methods of handling this strain by offering an amazing customer service experience during the periods of operational challenges.

Although local or regional insurance carriers tend to deliver better results than national insurers, this became reversed last year as a 22 point increment was discovered annually in the claim satisfaction for national insurers in the Western region generating 805 points.

According to JD Power, the satisfaction changes experienced by regional insurers operating in Western Canada is an indication of the enormous strain experienced during the McMurray fire.

Considering the occurrence of additional disasters such as the Quebec flooding, the yearly research recognized a separation between actual and noticeable coverage.

About 48% of the people interviewed in Quebec reported having overland flood coverage. This is a conflicting estimation to the report from the Bureau of Canada, which indicated that homeowners in the country with flood coverage are only about 10% to 15%.

JD Power reported that estimating the impact of the Quebec floods on customer satisfaction is too early.

Even if the losses generated can be compared to that of McMurray fires that offer a serious logistical challenge for insurers, Monet stated that agencies who implement the best procedures for a proactive method of customer interaction should attain a high level of customer satisfaction.

She advised that it has a great impact on insurers that are currently handling the huge stream of calls as a result of the Quebec floods irrespective of the coverage status of the customer.

The claim satisfaction of customers in the Western region is much lower than those of the customers in the Atlantic region, Quebec, and Ontario which is 773, 812, and 789 respectively.

But, additional reports from JD Power indicates that the typical satisfaction score for Western insurers that developed and adhered to a specific timeline in 823.

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