These days, almost everyone has a smartphone. Pew Research Center says 91% of U.S. adults own a smartphone, with usage being even higher among adults under the age of 65.
Most people have lots of apps on their phones. The average number is 35, according to Think with Google. The SensorTower 2024 State of Mobile report shows that app usage is at an all-time high, with users spending an average of five hours a day on mobile devices. Collectively, app users spent 5.1 trillion hours on mobile apps per day and downloaded 257 billion apps.
Smartphone Ownership by Age
• 18 to 29: 98%
• 30 to 49: 97%
• 50 to 64: 91%
Source: Pew Research Center
In addition, almost every business has an app. Now, more than ever, consumers consider apps the most convenient way to interact with businesses. For example, consumers increasingly depend on mobile apps to manage their finances. In a Chase study, 78% of respondents said they use their mobile banking app weekly and 62% said they can’t live without it. In 2023, the number of people using the Chase mobile app grew by 10%.
Given these numbers the rise of self-service has been inevitable. According to HubSpot, 55% of customers would rather use self-service channels like chatbots than speak with a representative. People like being able to find answers independently and at their own pace.
If consumers rely on self-service apps for shopping and finances, it’s logical that they’d want to use apps for insurance matters, too. This is especially true for managing issues that require ongoing communication and status checks. A mobile app is often the easiest way to submit information, monitor progress, and check for updates.
Poor Communication Frustrates Consumers
The rise of the internet in general and apps in particular has led to major shifts in the way people communicate, make purchases, handle finances, and interact with insurers. To meet new consumer expectations, insurers need to provide digital, self-service claim experiences – or risk losing business.
The Rise of Apps
Consumers have good reason to prefer self-service mobile apps over phone calls: long hold times are a common customer complaint. According to HubSpot, customers are likely to hang up after just two minutes and around one-third won’t call back. Even if policyholders stay on the line because they need to talk to someone, long wait times are likely to upset them.
Inconsistent customer experiences and having to repeat information every time the customer switches channels or representatives are also common frustrations. Consumers increasingly expect seamless omnichannel communication. Retailers have already learned this. According to a Harvard Business Review study of 46,000 shoppers, omnichannel shopping leads to higher revenues. It’s time for insurers to catch up.
Policyholder Satisfaction Has Taken a Hit
Insurers could use a win right now. After years of rate hikes, policyholder satisfaction has fallen, leading policyholder churn to skyrocket.
According to the J.D. Power 2024 U.S. Home Insurance Study, overall satisfaction among customers who have received a rate increase is 594 out of 1,000, which is 92 points lower than the satisfaction rate among policyholders who did not receive a rate increase. Additionally, 37% of homeowners who received a rate increase say they are likely to shop for a new policy.
The J.D. Power 2024 U.S. Auto Insurance Study reveals similar problems. In light of recent rate hikes, 51% of customers say they have little trust in their auto insurer. Given this, it’s no surprise that TransUnion says auto insurance shopping reached a new high in the first quarter of 2024.
The Impact of Claims on Churn and Shopping
Policyholders are unhappy about rising insurance costs. A poor claims experience may be the straw that breaks the camel’s back.
The J.D. Power 2024 U.S. Auto Claims Satisfaction Study contains some good news and some bad news. The good news is average repair cycles have decreased from 23.9 days to 18.9 days. The bad news is rising premiums have impacted the way consumers view claims. Nearly half of survey respondents had experienced a premium increase in the past 12 months, and claim satisfaction was particularly low in this group. Among auto insurance customers who reported poor claims experiences, 80% have left or are planning to leave.
Insurers may see premium hikes and claims experiences as two separate issues, but to policyholders, they’re inextricably linked. If policyholders are paying more for coverage, they expect to gain more. When the claims experience doesn’t meet their expectations, they have no reason to remain loyal.
Increasing Communication and Accelerating Time-to-Close Is Imperative
A ValuePenguin analysis of closed complaint data from the National Association of Insurance Commissioners found that delays in claim handling were the most common complaint.
People want insurers to close their claims as quickly as possible to get their lives back on track. The faster insurers close claims, the better. However, speed is relative. If you’re expecting a claim to take five days and it ends up taking 15 days, you’ll probably be upset. On the other hand, if you’re expecting a claim to take 20 days and it only takes 15 days, you’ll probably be happy. The time to close hasn’t changed, but your perception of it has.
There’s another, even worse scenario: The claim takes 15 days to close and the claimant has no idea what’s happening during this time. If insurance customers don’t hear anything from the claims handler, they might start to wonder if anyone’s looking at their claim. When they finally receive a resolution, they may wonder if it’s fair. Trust is already wearing thin – a black box claims process could erode the little trust that’s left.
To manage expectations, transparent communication is imperative. Claimants should be able to access claim status updates at any time and shouldn’t have to wait on hold whenever they have a question about their claims.
How an App Elevates the Claim Journey and Increases Satisfaction
People use apps for just about everything these days – from games and shopping to more important matters like finances. By offering a mobile app to manage the claims experience, insurers meet modern expectations and elevate the claim journey.
Consider the following two possibilities:
Claim Journey #1: No App
A policyholder’s car is stolen. She needs to report the loss on her comprehensive and collision auto insurance policy. As there’s no app, she calls to report the claim. After waiting on hold for 10 minutes, she’s finally able to relay the details. She needs to send over several documents, including the police report. She receives an email address to do this.
A couple of days later, the policyholder calls back to check the status of her claim. Without a car, she is unable to get to work and manage family obligations. The representative assures the policyholder that they’re processing her claim but can’t give an estimated timeline.
A week later, the policyholder receives a notice that the insurer has approved her claim. However, by this point, she is frustrated by the lack of communication and is thinking about switching carriers.
Claim Journey #2: App
A policyholder’s car is stolen. She uses her insurance app to report the loss. She’s able to upload the requested documents from her phone.
A few minutes later, she receives confirmation that the insurer has received the claim. She can also view her coverage details in the app and realizes she has coverage for a rental car.
Using the rental car, she’s able to get to work and take care of her personal commitments. As she’s still eager to have the claim resolved, she checks the app for updates. She’s able to track its progress in the app, which helps her feel better about the process. She reaches out using the messaging feature whenever she has questions.
When the insurer settles the claim a week later, and send her digital payment, she feels satisfied with the overall experience.
Can You Keep Up with Claimant Expectations?
Policyholder relationships are at a breaking point. Many policyholders are already shopping for new coverage, whereas those who have stayed may have one foot out the door. A poor claims experience could be the last straw. Mobile apps provide an easy solution.
VCA’s InsuredConnect app provides policyholders with an efficient, user-friendly app to navigate the claims process, empowering them to access policy details, report claims and access updates directly from their mobile devices. This significantly reduces processing times and ensures a more responsive experience.
Key Features:- 24/7 Access to Policy Information: Policyholders can view their policy details and important documents anytime, from any device.
- Instant Claim Reporting: Policyholders can quickly submit claims with supporting photos and videos, allowing for faster claim processing.
- Timely Updates: Stay informed on the status of a claim with continuous updates, ensuring transparency throughout the claims journey.
