Despite being the fastest growing area for the casualty and property re/insurance segment, micro to small carriers have seen their customer satisfaction rates decline sharply, contrasting with larger re/insurers whose rates have shown year on year improvement, according to J.D. Power 2017 U.S. Small Commercial Insurance Study.
Greg Hoeg, vice president of U.S. insurance operations at J.D. Power, said this trend highlights an opportunity for the fast-growing small business property and casualty segment to move one step ahead of the competition; “the small business market has been the best growth area for property and casualty insurance carriers in a stagnant, soft cycle marketplace.
“Our data shows that the small commercial market is still ripe for competition.
“While looking at the small business market in aggregate shows relatively steady levels of customer satisfaction year over year, the serious gap between very small businesses and larger small businesses could present an opportunity for those carriers that get the small business formula just right.”
The study judges customer satisfaction based on criteria of interaction, policy offerings, price, billing and payment, and claims, examining commercial insurers with 50 or fewer employees.
The sharpest declines this year were seen in service interactions, the most significant driver of overall customer satisfaction and due to customers being dissatisfied with agent/broker interaction, while the biggest annual improvement came from the claims factor.
The study found that the preference for self-service has grown by 28% since 2015 to reach 61%, however, this preference far surpasses actual levels of usage, and for micro businesses, the disparity grows notably to reach nearly twice the rate of actual usage.
Colleen Cairns, senior analyst in the insurance practice at J.D. Power, highlighted the “notable opportunity” these findings represent “for insurers of companies in the very small business segment, which are clearly not being serviced at the same level as their slightly larger counterparts.”
He advised that the key to effective growth in that slice of the market is “a focus on strong agent interactions and smart use of digital and self-service tools designed for the unique needs of businesses where the target customer is often the time-pressed owner of the business.”
