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Study: Spike in major catastrophic claims hit Western Canada home insurers

An increase in major claims following catastrophes in Canada like the Fort McMurray, Alberta, fire and Quebec floods led to western regional carriers experiencing a 10-point year-over-year decline in customer satisfaction with the claims process, according to the J.D. Power 2017 Canadian Home Insurance Study.

Insurance carrier resources had been under a "tremendous strain" with the increase in major catastrophic claims in Western Canada and Quebec, leading to longer-than-average claim payment cycles and customers experiencing greater annual premium hikes, among other things, Valerie Monet, director of the insurance practice at J.D. Power, said in a news release. However, some industry leaders were bucking that trend by providing "truly great customer experiences," Monet said.

While claims satisfaction may be slightly down for regional carriers due to higher claim volume in the west, overall customer satisfaction improved by 37 points on a 1,000-point scale because insurers "significantly improved" their nonclaims interactions.

The annual study examined nonclaim interaction, policy offerings, price, billing and payment, and claims to determine customer satisfaction with their homeowners insurance policy. Nonclaim interaction was based on factors, including local agent or broker, call center service representative and website.

The study said the Fort McMurray fire stretched the resources of western regional carriers. While claim satisfaction among western regional carriers dropped to 796 in 2017, from 806 last year, claim satisfaction for national carriers in the western region increased 22 points year over year to 805.

It also found a disconnect between perceived and actual coverage. Though about 48% of respondents in Quebec say they have overland flood coverage, the Insurance Bureau of Canada estimates only 10% to 15% of Canadian homeowners actually have such coverage.

The study found that managing expectations successfully also led to higher customer satisfaction.

In the Atlantic/Ontario region, The Co-operators had the highest customer satisfaction score at 794, followed by Economical Insurance at 792 and Allstate Corp. at 784.

RSA Insurance ranked highest in Quebec with a score of 842, followed by La Capitale with 832 and The Personal with 828.

In the western region, Portage Mutual Insurance topped the customer satisfaction ranking with a score of 801, followed by The Co-operators with 791 and BCAA with 788.

The 2017 Canadian Home Insurance Study, fielded in February to March, is based on responses from 7,422 homeowners insurance customers.