Communication Key to Retaining Small Commercial Accounts as Premiums Rise

• By: Olivia Overman
• August 20, 2025

Small commercial customers are more likely than ever to consider moving their business to another insurer at renewal, according to the 2025 “U.S. Small Commercial Insurance Study” by J.D. Power.

Amid rising premiums, just 55% of customers say they “definitely will” renew with their current insurer, down 6% from a year ago, the report said.

In addition to rising premiums, clients are also taking effective communication and superior service into account when considering switching agencies, the report says.

“Interestingly, the drop in retention is not solely attributable to higher premiums,” said Stephen Crewdson, managing director of global insurance intelligence at J.D. Power. “In fact, insurers that communicate well and provide a higher level of service can make huge inroads toward keeping customers.”

Declining retention levels can be seen in customers across virtually all demographic groups, with millennials exhibiting the steepest drop of 12 percentage points, the report said. And while competitive pricing is a key reason customers select and stay with an insurer, service is just as important—a good customer service experience is the most common driver of retaining small commercial accounts at 16%, beating out price, coverage options and reputation, the report said.

Further, communication about rate increases is vital to small commercial client satisfaction. Overall satisfaction among customers who say they completely understand why their premiums increased is identical to that of customers who have no increase at all: 722 on a 1,000-point scale.

“Remarkably, satisfaction is at an identical level among customers who understand why their premium is increasing as among those whose premiums are not increasing at all, which puts a huge onus on insurers to bolster their outreach around rate increases,” Crewdson said.

However, the number of customers who say they completely understand the reason for their rate increase has dropped by 5 percentage points since 2024.

Other drivers of small commercial client satisfaction include an insurers’ ability to demonstrate a complete understanding of a customer’s business, which drives a 37 percentage-point improvement in renewal intent, customers’ understanding of their policy (33 points), understanding premium increases (26 points) and resolving problems through the insurer’s website (23 points).

Olivia Overman is IA content editor.