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Small Business Insurance Customer Satisfaction Rebounds After Pandemic Lows

Despite 30% of small businesses experiencing a premium increase, customer satisfaction with the price of their policies rose three points in 2022.
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small business insurance customer satisfaction rebounds after pandemic lows

Small business customer satisfaction has bounced back from two years of pandemic-related declines, increasing to just two points lower than its pre-pandemic high, according to the J.D. Power “2022 U.S. Small Commercial Insurance StudySM."

Customer satisfaction had climbed steadily from 2013 to an all-time high of 844 on a 1,000 scale in 2019—until the pandemic. Business disruption and economic uncertainties during the coronavirus pandemic put a damper on small business customer satisfaction, which declined in 2020 for the first time in seven years and again in 2021. But happy days appear to be here again, with the 2022 study showing overall satisfaction reaching 842, climbing 13 points from 2021.

The study, which surveyed commercial insurance customers with 50 or fewer employees, found that insurers gained their small commercial clients' goodwill in all five categories—billing and payment, claims, interaction, policy offerings, and price. Interaction, billing and payment, and policy offerings led the service categories that clients were happiest with.

Despite 30% of small businesses experiencing a premium increase, customer satisfaction with the price of their policies rose three points in 2022. Proactive communication played a big role in boosting satisfaction despite price increases, J.D. Power found.

When premiums increased but clients were notified in advance—with agents taking the time to discuss ways to mitigate the effect of the increase and help them understand why their premiums increased—those clients were nearly as satisfied with price as those who didn't experience an increase at all.

“It's noteworthy that we're seeing increases in satisfaction across all factors—including price—at a time when 30% of small business customers have experienced an insurance premium increase," said Stephen Crewdson, senior director of global insurance intelligence at J.D. Power. “That's the highest proportion of customers experiencing price increases that we've seen in the past eight years."

“Insurers that notify their small business customers in advance of a price increase and proactively work with them to mitigate the financial effects of those premium increases are finding that it is possible to drive strong customer engagement and high levels of customer satisfaction even in a difficult economic environment," Crewdson said.

While overall customer satisfaction improved across all categories of small businesses, businesses with fewer than five employees had a lower overall satisfaction score (826) than medium-size (841) and larger (852) small businesses.

While State Farm ranked highest in overall customer satisfaction at 856, Chubb, Nationwide, Allstate, Erie Insurance, Auto-Owners Insurance and Travelers all ranked above the industry average of 842.

AnneMarie McPherson Spears is IA news editor. 

Thursday, September 1, 2022
Commercial Lines