More than half of insurance customers will drop their coverage if their digital claims experience is “poor” or “very good,” a new study has found.
The survey, conducted by consumer research firm JD Power, found that 52 percent of auto and home insurance customers would drop their insurance because of this problem.
The company’s 2025 US Claims Digital Experience Study highlighted the importance of digital offerings and communications not only to help claims flow more smoothly, but also to improve customer retention.
“In the insurance claims workflow, from first notice of loss to estimates and ongoing status updates, customer satisfaction scores are higher when customers can manage the process through their insurer’s digital apps and websites,” Mark Garrett, director of JD Power of Global Insurance Intelligence, said in a statement.
According to JD Power, the study collected data from 5,958 auto or home insurance customers and analyzed an insurer’s mobile and web offerings (“channels”) in four categories: clarity of information, ease of use of channels, usefulness of channels and range of services.
The study shows the gap between customer expectations and the insurer’s digital channels
Overall, the study noted that consumers prefer their insurer to provide them with “sufficient” digital updates. However, home and auto insurers only offer it 22 percent of the time, leading to customers feeling disconnected from their policy provider and having to take extra steps to find information.
Despite extensive industry efforts to promote digital first notice of loss and claims management, 22 percent of customers still rely on multiple channels to find answers to a question, the study noted.
App-based status updates are another important area for customer satisfaction, but as the study found, only 36 percent of auto insurance customers and 31 percent of home insurance customers receive their updates through their app.
“Auto and home insurers have finally nailed the digital formula with streamlined reporting tools, proactive updates and well-designed apps,” Garrett said. However, the industry still has work to do to help policyholders navigate between digital and offline channels, which can sometimes create unnecessary friction in the claims process.
The analyst says that insurance companies have room for improvement
Overall, though, insurance companies are doing a fairly good job, JD Power digital solutions analyst Kristen Coffin said in a statement.
“There are still a few key areas where customers end up looking for information and need to repeat unnecessary steps,” Coffin said. “There is a real opportunity for insurers to create a complete digital experience that makes customer needs more predictive.”
Profit for insurers? Customer Retention JD Power found that customers who rated their digital experience as “excellent” or “perfect” were only 4% more likely to leave or fail to renew their policy.
