Small businesses value personal interaction with agents or brokers who understand their individual business, as the highest-ranked insurers delivered on both of these metrics for 60 percent of their customers, compared with the lowest-ranked insurers at 33 percent, according to the “J.D. Power 2013 U.S. Small Business Commercial Insurance Study,” released today.
Six insurers received ratings beyond the industry average (777), led by Erie Insurance (808). Erie performed particularly well in the interaction and policy offerings categories, according to J.D. Power. American Family and Nationwide tied for second overall at 794 each. American Family performs particularly well in price, while Nationwide performs well in billing and payment.
The other three insurers with above-average customer satisfaction were Auto-Owners (789), State Farm (787) and Allstate (782).
While satisfaction is significantly higher when an agent or broker understands their customer's business and provides guidance regarding risk (835) than when neither of these metrics is met (645). The study also found that policy offerings — not price — is the primary reason small business customers select an insurer; level of service is the primary reason they stay with their insurer more than two years.
Indeed, the higher the employee count, the more important the product selection becomes. Sixty-two percent of small businesses with 11-50 employees indicate policy offerings are a leading reason for retaining business with their insurer, compared with 50 percent of businesses with fewer than five employees.
For the survey, J.D. Power broke down overall satisfaction into five factors interaction: interaction, policy offerings, price, billing and payment, and claims.
Among the factors, interaction has the highest importance weight at 29 percent, followed by policy offerings at 26 percent. Interaction satisfaction is highest when customers interact with an agent or broker in person (854). In contrast, satisfaction is significantly lower when customers interact via e-mail (819).
Customer satisfaction is highest among small businesses with 11-50 employees, compared to businesses with four or fewer employees (790 vs. 769, respectively); again, agents and brokers spending more time with these key accounts is the biggest reason for the differential in satisfaction. Agents and brokers are not only interacting with these larger businesses more frequently, but the interactions are also three times more likely (24 percent vs. 8 percent) to be made in person, according to J.D. Power, compared to businesses with four or fewer employees.
The report also noted that satisfaction is higher when insurers inform small business customers about price changes in person (823) than when they inform customers by phone (805) or email (783).
The inaugural study examines overall customer satisfaction, insurance shopping and purchase behavior among small business commercial insurance customers with 50 or fewer employees. The study’s rankings were based on a 1,000-point scale.
The “2013 U.S. Small Business Commercial Insurance Study” is based on 3,742 responses from insurance decision-makers in businesses with 50 or fewer employees that purchase general liability and/or property insurance. The study was fielded from April 2013 through July 2013.
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