Key Takeaways
- Fully digital FNOL experiences support higher levels of claimant satisfaction.
- Insurers are still falling short on basic expectations, such pre-filled forms.
- Insurers stand to lose billions due to claim dissatisfaction and policyholder churn.
- A digital FNOL process that is simple and intuitive can provide the convenient experience policyholders crave.
- Truly digital FNOL processes also reduce data entry, so insurers can reallocate talent.
A fully digital FNOL experience drives better customer satisfaction scores. That’s the takeaway from the JD Power 2025 U.S. Claims Digital Experience Study.1 Personally, I’m not surprised. A digital FNOL process is faster, easier, and generally better than the options that came before. But for any insurance companies still clinging to outdated processes or awkward hybrids, this should be a wake-up call.
Where Are Insurers Falling Short?
Accenture’s Pulse of Change survey found that 90% of insurance executives say they’re planning to invest more in AI in 2026.2
The question isn't whether insurers are investing in AI. They clearly are. The real question is whether they're investing in the right AI solutions to solve their most pressing challenges, and doing so quickly enough. Policyholders don’t seem to think so.
JD Power found a strong link between adequate digital claims updates and higher levels of policyholder satisfaction, but insurers are delivering on this basic expectation just 22% of the time.
Policyholders want a streamlined digital FNOL experience. Instead, they’re getting confusing processes that force them to use specific channels, even if that’s not their preference.
How Much Do Insurers Stand to Lose?
A claim is a make-it-or-break-it point for policyholders. If they’re unhappy with the experience, they have no reason to stay.
According to JD Power, 52% of auto and home policyholders who rated their digital claim experience as “poor” or “just OK” say they are likely to leave the carrier. Among policyholders who rated their digital experience as “excellent” or “perfect,” only 4% say they are likely to leave.
Policyholder churn is expensive. Accenture estimated that insurance companies could lose up to $170 billion in premiums over a five-year period due to poor claims experiences that cause policyholders to leave.3
Insurers that deliver a comprehensive digital FNOL experience are in a good position to avoid this costly churn. Insurers that fall short risk losing a growing percentage of their book of business, making any growth an uphill battle.
It's time for a better digital FNOL process.
How Can Digital FNOL Meet Customer Expectations?
Another JD Power study, the 2025 U.S. Auto Claims Satisfaction Study, found that rising insurance costs are affecting the claims experience. Although auto insurance rates have started to fall from record highs in 2024, 26% of auto policyholders have a deductible of at least $1,000.4
Claims are always painful from the policyholder perspective, but with a high deductible, they’re even worse. At the very least, policyholders expect to receive their money’s worth in the form of a fast, headache-free claims experience.
With a digital FNOL process, this is possible, but only if it’s a truly digital experience. Simply slapping a form on your website doesn’t cut it. Adding generic AI that doesn’t understand insurance won’t help, either. Insurers need a comprehensive digital FNOL experience that uses insurance-native AI.
Insurance-native FNOL forms are:
- Smart: Because your digital FNOL is integrated with many other systems and data sources, forms can automatically prefill with known policyholder data and information. For auto insurance, this may include vehicle details, location information, DMV data and policy information. Smart forms save claimants time and reduce the friction and frustration of form completion.
- Adaptive: The claimant’s response to each question determines the course of subsequent questions. This means that claimants are only asked questions that are relevant for their type of claim and the unique circumstances of their claim. The form fields that Claimant A sees might be much different than the fields claimant B sees. When appropriate information is captured by an adaptive form, adjusters have the right information from the start. They can proceed without having to ask claimants to re-explain everything. For simpler claim scenarios, automation can be built in so that claims can be instantly settled, without requiring an adjuster to become involved.
- Hyper-personalized: It feels good to be known by your insurer and to have your time respected, and that’s exactly how claimants feel when they experience a convenient process that is designed to take as little time as possible.
What Problems Can Truly Digital FNOL Processes Solve?
A truly digital FNOL process can reduce friction for the claimant while also eliminating a lot of the backend work for your team.
- Claims professionals save time. This reduces workloads and results in cost savings, not just in the FNOL, but also in subsequent stages of the claim.
- Claimants enjoy a streamlined process. They avoid the time-consuming redundancies that exist in traditional claims processes, resulting in a superior experience.
- Customer churn and claim litigation can be reduced. Claimants have less reason to shop for other coverage following a claim. If their needs are promptly met and they feel like they’ve been treated fairly, they will also have less reason to get an attorney involved.
- Claims professionals are free to focus on more complex challenges. When claims adjusters are freed from the mundane, they have more time for rewarding tasks that require human expertise and decision-making.
What’s Your AI Priority?
The vast majority of insurers are investing in AI right now. This means that simply investing in AI won’t be enough to gain a competitive edge. To pull ahead in the AI race, insurers need to invest in the tools that solve critical problems now.
With Liberate’s digital FNOL, P&C insurers can build fully automated FNOL processes that deliver superior policyholder experiences and improve operational efficiency. Even better, implementation takes weeks, not years.
Sources:
- https://www.jdpower.com/business/press-releases/2025-us-claims-digital-experience-study
- https://www.insurancebusinessmag.com/us/news/technology/insurers-push-ahead-with-ai-despite-skills-gap-562922.aspx
- https://newsroom.accenture.com/news/2022/poor-claims-experiences-could-put-up-to-170b-of-global-insurance-premiums-at-risk-by-2027-according-to-new-accenture-research
- https://www.jdpower.com/business/press-releases/2025-us-auto-claims-satisfaction-study
