Auto Insurers: How to Increase Millennial Claims Satisfaction

How important are millennials to your business? “Gen Y is the only generation of auto insurance customers that is growing,” said Mark Garrett at JD Power. “It’s critical that providers continue to focus on those younger generations as they are the future of their business.”

And, when it comes to claim satisfaction, millennials are hard to please. There’s good news, though. According to the 2015 Claims Satisfaction Study that JD Powers released last month, claimants born between 1977 and 1994 moved up a few points on the satisfaction scale. In 2014, they measured 819 out of a thousand. This year, they’re at 827.

Small gain? Maybe, but any amount of progress is encouraging when you’re talking about a generation whose satisfaction with claims measures well below that of any other age group.

Last year, for example, Gen X claimants measured 847 in satisfaction. Their number is even higher now, but even taking the less rosy score, Gen X drivers still show more satisfaction than Gen Y drivers do now after getting a little happier in 2015. And Gen Y satisfaction can’t hold a candle to Pre-Boomers (those born before 1947), whose satisfaction is practically sky-bound, hovering around the 900 mark.

The millennial riddle … how to increase claims satisfaction?

1. Communication. JD Powers observed that the gains in satisfaction between this year and last had to do with how well insurers explained the claims process and kept drivers informed. Drivers who chose to receive electronic updates via email, text or website scored higher satisfaction than those who didn’t. Of Gen Y claimants, almost half (42 percent) opted in.

TAKEAWAY. Communicate with your policyholders frequently throughout the claims process. Send emails or ping them via smartphone to let them know what the next step will be.

2. Technology. Gen Y drivers who submitted pics via mobile app (17 percent) were more satisfied … a lot more. They logged a star-scraping 850 compared to only 823 from those who didn’t submit photos. Gen Y was the most likely age group to use technology in this way.

TAKEAWAY. Make it easy for claimants to submit photos through a mobile device, so they’ll have a way to document damages whenever and wherever they occur.

3. Expectations. One of the biggest contributors to dissatisfaction was how long it took from commitment to delivery: how many days pass before a driver receives funds once their insurer has agreed to pay a certain amount? Most drivers wait seven days to find out what their policy will cover. Then they wait an additional 19-20 days to get the money.

The timeframe isn’t necessarily the problem here: it’s the expectations. When insurers don’t manage expectations, 62 percent of claimants think the wait is going to be shorter than it is. When claimants find out they’re wrong, their satisfaction drops.

TAKEAWAY. Tell claimants what to expect. As soon as a policyholder makes a claim, send a message to let them know how long you’ll take to get back to them with what their policy will cover. When you do get back to them, tell them how long it will take before the payment is received.

Harness mobile technology to improve communication with claimants.

For each of the three points above, insurers in the best position to improve millennial claims satisfaction are those who use smartphone technology to communicate, receive pics and touch base with frequent, friendly messages. That’s an important component to millennial satisfaction – and as JD Powers pointed out, millennial satisfaction is paramount.

Interestingly, your smartphone telematics app could serve as a portal for many of these service features. Learn more about smartphone telematics for insurers or download our fact sheet.