While commercial insurers have traditionally relied upon insurance brokers to manage customer relationships, large company risk managers are looking for both parties to work together to meet their needs, according to a new study.
While brokers are the most frequent point of contact for customers for service-related interactions, the study finds that customer satisfaction is notably higher when insurers are involved during service interactions, compared with service interactions that are exclusively with the broker (865 vs. 769, respectively, on a 1,000-point scale among property customers).
The study also finds that there is not a strong relationship between the service interactions that a customer has with their broker and a customer’s overall satisfaction with their insurer.
The J.D. Power 2014 Large Business Commercial Insurance Study measures customer satisfaction of large business insurance risk professionals in the U.S. and Canada with commercial property, workers’ compensation and auto insurers based on five factors: interaction; program offerings; price; billing and payment; and claims.
“Although a broker may interact with risk professionals on a daily basis, risk professionals are able to separate their overall impression of their insurer from their broker interactions, evaluating their insurer independently from their broker,” said Timothy Bebout, director of the commercial insurance practice at J.D. Power. “While it is critical, as a brokerage provider, that you are providing high levels of service and including insurers on a frequent basis, it is clear that the risk professionals expect insurers to elevate their participation as more of a partnership than managed service provider.”
Overall satisfaction with brokers averages 854. The range of performance among brokers spans 48 index points between the highest- and lowest-scoring brokers.
Satisfaction with Brokers
Satisfaction with brokers is measured based on four factors: ease of contacting broker; reasonableness of fees; advice and guidance in selecting program offerings; and timeliness of resolving contact.
The ease of contacting broker—the most important factor in determining satisfaction with a broker—has the highest score (888) in the overall customer experience with a broker. Reasonableness of fees has the lowest score at 828.
Critical to satisfaction with brokers is their ability to understand their customers’ business needs. Satisfaction among the 84 percent of customers who say their broker “completely” understands their needs is 890. Satisfaction drops sharply to 662 among the 16 percent of customers who say their broker either “partially” or does “not at all” understand their needs.
Among insurance coverages, satisfaction with property insurers is highest (821), followed by auto (811) and workers’ compensation (746). The study finds a wide variance in overall satisfaction among the highest- and lowest-performing commercial insurers in each of those three insurance coverages, with a 112-point gap in auto; a 96-point gap in workers’ compensation; and a 107-point gap in property.
- There is a strong relationship between satisfaction levels and loyalty and advocacy. Among property insurance customers who are “pleased/delighted” (overall satisfaction scores of 800 or higher), 62 percent say they “definitely will” renew with their current insurer and 80 percent say they “definitely will” recommend their insurer. In contrast, only 22 percent of customers who are “indifferent/displeased” (scores below 800) say they “definitely will” renew and 26 percent say they “definitely will” recommend their insurer.
- Satisfaction among the 93 percent of auto insurance customers who do not experience a problem during renewal is 742.
- Limiting billing errors is crucial to customer satisfaction with workers’ compensation. Overall satisfaction among the 62 percent of customers who have not experienced a billing error averages 807, compared with 518 among those who have experienced one or more billing errors—a difference of 289 points.
The 2014 Large Business Commercial Insurance Study is based on responses from nearly 1,000 risk professionals or employees of an organization who provide oversight or are members of their organization’s risk management team. Organizations included in the study have at least $100 million in annual revenue or operating budget, and have purchased commercial property, workers’ compensation or auto insurance from one of the profiled insurers or brokers.