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Small Commercial Client Satisfaction Declines, Interaction Insufficient

Nearly 1 in 3 small business insurance clients said they had to exert a great deal of effort to interact with their agent, up from 1 in 10 a year ago.
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small commercial client: satisfaction declines, interaction insufficient

Small business insurance customers are feeling neglected by insurers, according to the J.D. Power 2021 U.S. Small Commercial Insurance StudySM, with customer satisfaction declining 15 points in the past two years. The 8-point decline from 2019 to 2020 and the 7-point decline from 2020 to 2021 represent the only declines since the study began in 2013.

The study examines overall customer satisfaction among small commercial insurance customers with 50 or fewer employees, measuring interaction, policy offerings, price, billing and payments, and claims.

Interacting with their agents was a notable rough spot for small businesses. Satisfaction with interactions took a 20-point hit between 2020 to 2021.

In particular, small businesses had to work harder to get in touch with their agent. Nearly 1 in 3 clients said they had to exert a great deal of effort to interact with their agent, up from 1 in 10 a year ago. With digital interactions, the amount of clients who had to put in extra work to contact their agent increased to 34%.

In 2020, only 19% of clients indicated that their carrier proactively reached out to them to discuss business needs related to COVID-19. While the proactive contact increased to 45% in 2021, the positive impact reported on customer satisfaction declined 31 points—a sign insurers may have been too late.

When it comes to communication, both quantity and quality matter. Among customers who received proactive outreach from their insurer, 46% cited problems and billing issues, up from 26% in 2020.

“We see a real pattern of small business insurers missing the mark on soft skills, such as interaction with agents and proactive outreach—both being areas in which commercial insurers have historically thrived," said Robert M. Lajdziak, senior consultant of insurance intelligence at J.D. Power. “There's also a trend in which small commercial customers spend three times more effort interacting with their carrier on the website, on the phone or with agents."

The findings echo the results of a 2020 study—the J.D. Power U.S. Independent Agent Performance and Satisfaction Study, developed in alliance with the Big “I"—which found that independent agents must adapt to maintain dominance among distribution channels due to COVID-19, rising competition and evolving consumer appetites.

As far as specific markets in which clients are reporting the most dissatisfaction, “the largest declines in the study are among customers who had workers comp coverage or commercial auto policies," Lajdziak said. “Carriers will want to pay particular attention to customers with these types of policies."

While Allstate ranked highest in overall customer satisfaction with a score of 848, State Farm, Erie Insurance, Farmers, Chubb and Travelers all ranked above the 829 industry average.

AnneMarie McPherson is IA news editor. 

Wednesday, October 27, 2021
Commercial Lines