LexisNexis 2022 U.S. Auto Insurance Trends Report Shows Customers Growing Comfortable With Digital Self-Service Claims Processing, But Are Frustrated With Unresponsive Systems to their expectations.
The report notes that, according to its 2021 Future of Claims study, consumer preference for self-service claims has increased among Millennials, Gen Xers and Baby Boomers over the past two years, in some cases up to 16 percentage points.
For example, the 2021 study found that 50% of millennials are comfortable submitting photos and documents online and 47% are comfortable submitting estimates.
Comfort levels with digital processes are lowest among baby boomers, with only 36% preferring digital First Notice of Loss (FNOL) submission and 40% preferring photo and document submission.
At least 50% of each group prefers being able to verify the approval and payment of their applications online, the only activity that achieves this level of comfort.
LexisNexis suggests that consumers are becoming more comfortable with digital self-service options and this could impact insurance interactions. At the same time, these other self-service options can create expectations that insurers don’t meet.
“Your customers are becoming familiar with digital self-service in many aspects of their lives – including banking, consumer packaged goods and education,” the report says. “Many of these industries provide intuitive and seamless experiences. So, they’ve set the bar for how customers will evaluate [carriers] in the provision of similar services.
In fact, according to LexisNexis, the number of touchpoints between customer and insurance carrier hasn’t decreased since a similar study in 2019. Today, 29% of consumers speak with three or more people to settle their claims, compared to 20% two years ago.
The report states that these “multiple points of contact continue to be a cause of frustration for requesters”. He calls this gap between customer expectations and the actual experience a “disconnect.”
In other words, the industry has made no measurable progress toward “contactless” claims, in which telematics technology or the customer reports the damage, and artificial intelligence assesses and pays the claim, without human intervention. .
The LexisNexis report echoes the JD Power 2021 US Insurance Digital Experience study, released in May 2021, which found that digital offerings were not keeping pace with consumer expectations.
“Overall customer satisfaction with P&C customer service experience improves to 860 (on a 1000 point scale) from 858 in 2020 and overall satisfaction with customer service experience purchase declines to 788 from 800 a year ago as record numbers of insurance customers went digital at the height of the pandemic. Beneath these numbers, many individual insurers have seen choppy year-over-year fluctuations in their overall satisfaction scores,” JD Power said.
“Being ‘good enough’ is not enough in a world where consumers manage much of their lives through digital interfaces and challenge conventional notions of customer engagement,” said Michael Ellison, president of Corporate Insight, a partner of JD Power. “While most insurers allow basic functions to be performed online or via mobile, very few offer a much improved and highly personalized overall experience via digital, even as innovative companies show that it is possible to do so. now.”
Mixed findings on telematics
The LexisNexis report also looks at the use of telematics data. It reveals that 76% of the top 50 U.S. auto insurance companies believe the use of telematics can reduce the cost of insurance for consumers, primarily through smartphone apps.
Only 30% of insurance companies were using telematics exchange data at the time of the survey, LexisNexis said. Still, “all respondents responded that they were ‘at least somewhat interested’ in using telematics data exchange over the next three years, with the top 10 insurers expressing the most interest.”
At the same time, operators using telematics find that their applications do not fully meet their needs, the report says. “Around 60% of respondents said apps produce incomplete and limited telematics data, making insurers less confident in the telematics data they use to assess and calculate risk,” undermining a major benefit of technology.
Despite the shortcomings, 70% of the 10 largest US carriers that took part in a 2021 survey said they expect telematics data to become a core part of their business at some point. Additionally, according to LexisNexis, 96% said they felt the need to invest in telematics now to avoid being left behind by competitors.
Consumers have been slow to switch to telematics-based products, with only 22% choosing to have their driver and vehicle data used to set their insurance premiums. It’s not because consumers aren’t familiar with the technology — 67% of consumers know their data can be used in this way, according to a December 2021 US consumer survey by LexisNexis, and 71% say they’re interested in it. such an app.
LexisNexis attributes the greatest interest in usage-based insurance (UBI) to pandemic-related changes in driving habits, “as policyholders increasingly feel that more traditional insurance models can no longer meet their needs”.
The report found that of the 265 million vehicles on US roads, 50 million have connectivity capabilities that allow odometer mileage data to be transmitted. Through its agreements with OEMs, LexisNexis said it expects to be able to collect mileage data from more than 30% of connected vehicles in 2022.
Vehicle production affects ADAS adoption
Reduced vehicle production resulting from supply chain disruptions and other issues is impacting the percentage of vehicles on the road equipped with advanced driver assistance systems (ADAS) technology, a said LexisNexis.
Still, he said, “the number of ADAS-equipped vehicles has continued to steadily increase with the launch of each new model year.”
The report states that 46% of vehicles on the road are model year 2014 and newer and that 51% of those vehicles are ADAS-equipped, meaning the technology “has the potential to influence the performance of claims on a significant part” of the vehicles in use. .
A recent LexisNexis study found that ADAS tended to reduce claims frequency, but had little effect on claims severity. ADAS-equipped vehicles have been shown to have an 8% reduction in collision claims cost, compared to a 23% reduction in personal injury cost and a 14% reduction in property damage cost.
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Featured Image: A motorist takes a photo of damage to a car in a collision. (monkeybusinessimages/iStock)
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