Understanding the exposures of commercial clientele is not only important in reducing an agency’s errors and omissions risk; it’s important to the agency’s and carrier’s bottom line, too.
Small commercial lines insurance customers most value having an insurance agent or broker who completely understands their individual business and helps them assess, and manage, their risk.
The highest-ranked small business insurers deliver on both of these metrics for 60 percent of their customers, compared with the lowest-ranked insurers at 33 percent, according to a new study by J.D. Power, “2013 U.S. Small Business Commercial Insurance Study.”
The study examines overall customer satisfaction, insurance shopping and purchase behavior among small business commercial insurance customers with 50 or fewer employees. Overall satisfaction is comprised of five factors (in order of importance): interaction; policy offerings; price; billing and payment; and claims.
The overall customer satisfaction among small business customers is 777 on a 1,000-point scale.
The study found that 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).
Policy offerings — not price — is the primary reason small business customers select an insurer while the level of service is the primary reason they stay with their insurer for more than two years.
Among the five factors impacting satisfaction, 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 email (819).
Customer satisfaction is highest among small businesses with 11-50 employees, compared to businesses with four or fewer employees (790 vs. 769, respectively). Higher scores among larger businesses are influenced by agents and brokers spending more time with these key accounts.
Consultation via face-to-face interactions is the gateway to better understanding a customer’s needs. Small businesses that receive regular in-person contact with agents are more likely to understand their coverage, its value and the reason for a price adjustment should one occur. Plus, these customers are also more likely to be satisfied and loyal to their agents and insurers.
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