Not all small businesses are the same when it comes to customer satisfaction with their commercial insurance. There are actually widening satisfaction gaps among small businesses of different sizes, according to the J.D. Power 2017 U.S. Small Commercial Insurance Study.
The study found that the gaps in overall satisfaction among micro- (fewer than five employees) or smaller-size (five-10 employees) small businesses and larger-size (11-50) small businesses have never been wider. While there has been significant year-over-year improvement in overall satisfaction among customers in the larger-size group, there have been sharp declines in satisfaction among customers in both smaller-size groups.
“The small business market has been the best growth area for property and casualty insurance carriers in a stagnant, soft cycle marketplace,” said Greg Hoeg, vice president of U.S. insurance operations at J.D. Power. “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, now in its fifth year, examines overall customer satisfaction 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. Satisfaction is calculated on a 1,000-point scale.
Following are some of the findings of the study:
“There is a notable opportunity 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,” said Colleen Cairns, senior analyst in the insurance practice at J.D. Power. “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.”
J.D. Power Rankings
Farmers ranks highest among small commercial insurers with a score of 838, a 20-point improvement from 2016. Allstate ranks second with a score of 833, up 6 points from last year. Chubb and Erie Insurance rank third, in a tie, with a score of 830, up 20 points and 1 point, respectively, from 2016.
The 2017 U.S. Small Commercial Insurance Study is based on 3,312 responses from insurance decision-makers in businesses with 50 or fewer employees who purchase general liability and/or property insurance. The study was fielded from April through June 2017.
|Overall Customer Satisfaction Index Scores||J.D. Power.com Power Circle Ratings|
|(Based on a 1,000-point scale)||For Consumers|
Power Circle Ratings Legend
5 – Among the best
4 – Better than most
3 – About average
2 – The rest
Award-Eligible Insurance Providers Included in the Study
|Company||CEO Name||Company Location|
|AIG||Brian Duperreault||New York, N.Y.|
|Allstate||Thomas Wilson II||Northbrook, Ill.|
|American Family||Jack Salzwedel||Madison, Wisc.|
|Auto-Owners Insurance||Jeffrey Harrold||Lansing, Mich.|
|Chubb||Evan G. Greenberg||Warren, N.J.|
|CNA Insurance||Dino E. Robusto||Chicago, Ill.|
|Erie Insurance||Timothy NeCastro||Erie, Pa.|
|Farmers||Jeffrey Dailey||Woodland Hills, Calif.|
|Liberty Mutual||David Long||Boston, Mass.|
|Nationwide||Stephen Rasmussen||Columbus, Ohio|
|State Farm||Michael Tipsord||Bloomington, Ill.|
|The Hartford||Christopher Swift||Hartford, Conn.|
|Travelers||Alan Schnitzer||New York, N.Y.|
|Zurich||Mario Greco||Schaumburg, Ill.|
Source: J.D. Power
*This story appeared previously in our sister publication Insurance Journal.