J.D. Power 2025 Study Reveals Gaps in Digital Claims Experience Impacting Customer Retention

The J.D. Power 2025 U.S. Claims Digital Experience Study highlights key trends in digital claims management within the property and casualty insurance sectors, specifically auto and home insurance. The study finds that customers report the highest satisfaction when claims can be managed entirely through digital channels from initial reporting to claim status updates. However, a significant gap remains as many insureds still must switch to traditional communication channels like phone calls or emails to complete their claim process, indicating incomplete digital integration. Proactive communication and timely status updates stand out as crucial drivers of customer satisfaction in digital claims workflows. Despite this, only about 22% of insurers provide adequate digital updates, with just 36% of auto and 31% of homeowners insurance customers receiving claim status notifications through insurer mobile apps. This underuse of digital communication results in friction and a disconnected customer experience, where multiple channels are needed to resolve even a single query. The study underscores the impact of digital claims quality on customer retention, showing that customers rating their digital experience poorly are over half likely to consider switching insurers, whereas those with excellent digital experiences are significantly more loyal. This emphasizes the direct link between efficient digital claims processes and insurer competitive advantage in retention. J.D. Power collected nearly 6,000 consumer evaluations from December 2024 to August 2025 and restructured the study methodology to focus on digital touchpoints throughout the claims journey. Their research reinforces that while digital tools have improved, insurers can further enhance the end-to-end digital experience by anticipating customer needs and delivering more comprehensive digital updates. Overall, the study provides actionable insights for insurers aiming to reduce customer churn through strategic investments in digital-first claims solutions. Enhancing app functionality for proactive communication and streamlining claims workflows to minimize channel switching can support better client engagement and satisfaction in a competitive insurance marketplace.