A stark new warning has been issued to the insurance industry: more than half of all customers are prepared to walk away if their digital claims experience fails to meet expectations. The finding comes from the influential 2025 US Claims Digital Experience Study by consumer research firm J.D. Power, which highlights a critical vulnerability for providers.
Digital Failure Drives Customer Exodus
The poll, which gathered responses from 5,958 auto and home insurance customers, delivered a clear message. Fifty-two percent of customers stated they would leave their insurer if the digital claims process was rated as "poor" or merely "just okay." This underscores that digital offerings are no longer a luxury but a fundamental pillar of customer retention.
Mark Garrett, Director of Global Insurance Intelligence at J.D. Power, emphasised the direct link between digital efficiency and satisfaction. "Across the insurance claims workflow, from first notice of loss to the estimate and ongoing status updates, customer satisfaction scores are highest when customers are able to manage the process via their insurers’ digital apps and websites," he said in a statement.
A Significant Gap Between Expectation and Reality
The study identified a major disconnect. While consumers overwhelmingly want "adequate" digital updates from their insurers, providers are falling short. The research found that home and auto insurers successfully provided this level of communication only 22% of the time.
This failure forces policyholders to take extra steps, often using multiple channels to find answers to a single question. The study noted that 22% of customers still rely on multiple channels for the same query, despite industry pushes for digital-first claims management.
App-based updates are another sore point. Only 36% of auto insurance customers and 31% of homeowners insurance customers receive updates through their insurer's mobile app. "Auto and home insurers have finally gotten the digital formula right with streamlined reporting tools, proactive updates, and well-designed apps," Garrett observed. "However, the industry still has some work to do when it comes to helping insureds navigate between digital and offline channels, which can sometimes create unnecessary friction."
A Clear Opportunity for Proactive Insurers
Despite the challenges, analysts see a clear path for improvement. J.D. Power Digital Solutions Analyst Kristen Coffin commented that insurers are performing relatively well overall, but key weaknesses remain. "There are still a few key areas where customers end up hunting for information and need to repeat steps unnecessarily," Coffin stated.
She pinpointed the solution: "There is a real opportunity for insurers to create a complete end-to-end digital experience that anticipates customer needs more proactively." The reward for achieving this is substantial. The study found that customers who rate their digital experience as "excellent" or "perfect" have a mere 4% chance of leaving their insurer or failing to renew their policy.
The data presents a compelling business case. In an era where customer loyalty is hard-won, enhancing the digital claims journey from start to finish is not just an IT project—it is a crucial strategy for survival and growth in the competitive UK insurance market.
