Satisfaction among homeowner-insurance policy holders is improving, despite a difficult 2016.

Homeowner insurers receive record-high claimant satisfaction rating

Every year, the J.D. Power U.S. Property Claims Satisfaction Study scores property insurers according to collective claimant satisfaction. For 2016 that score was higher than it ever has been: 859 out of 1,000. This is a marked improvement over 2015's score of 846, which had been the first decrease in five years. 

Most importantly, it's a sign that the industry is becoming increasingly conscious of consumer satisfaction. 

The scoring criteria
J.D. Power ranks insurers by five key metrics:

  1. Settlement: Amount of money offered by the insurer. 
  2. First notice of loss: Initial reporting of a claim or incident.
  3. Estimation process: Assessment of claim or damage to estimate its value. 
  4. Service interaction: Interaction with insurer and customer service agents.
  5. Repair process: Fixing damage following a settlement.

Of these areas, settlement factor was the main driver of the improvements, followed by estimation process and service interaction. This is somewhat surprising (and for that matter impressive) considering incurred losses and loss-adjustment costs increased by 7.6 percent between 2015 to 2016. Additionally, the number of catastrophe-related claims rose – notable climate occurrences such as Tennessee's forest fires, Hurricane Matthew and 1,000-year flooding events in Louisiana certainly had a hand to play here.

Problem areas remain

"Customers want processes that are less time-consuming and more intuitive."

Despite notable improvements, claimants still have several key pain points. Water damage and other claims that are difficult to settle quickly fell by as many as 39 points. According to Property Casualty 360, these lower scores make sense. One of the key findings of the report was that the speed at which claims are resolved is of the utmost importance to customers. 

The other notable concern, according to a separate J.D. Power report, is the dissatisfaction of generation Y (customers aged 21 to 38). As the homeowners of the future, this is somewhat troubling for the industry as a whole. New on-demand insurance startups have potential for better or worse. 

But even this component has a silver lining. In the past few years, property insurers as a whole have rapidly adopted new forms of technology to improve processes. This includes Big Data strategies like the use of telemetry to create use-based auto-insurance policies. Meanwhile, some homeowners can receive rate discounts if they use smart home technology. Then there's the rise of mobile applications:

"Insurance companies are starting to offer mobile applications that can help in offering quotes, reporting claims, accessing information and even allowing customers to summon agents to their home," Property Casualty 360's Joseph Jaafari wrote. 

It all boils down to the fact that customers want processes that are less time-consuming and more intuitive. Technology is not an in by itself, but rather a means to get to better customer satisfaction.