Small Businesses Aren’t Feeling the Love From Their Carriers: J.D. Power

Small businesses aren’t feeling love right now from their property/casualty insurers. Instead, it’s neglect.

Customer satisfaction for small businesses dropped 15 points in the past two years – 7 points from a year ago and 8 points from 2019 to 2020. These are the only declines in the study’s history, J.D. Power noted in its 2021 U.S. Small Commercial Insurance Study. Even worse, satisfaction with interactions dropped 20 points from a year ago.

Adding insult to injury, customers facing problems or billing-related issues have to use multiple avenues to get answers. According to J.D. Power, these customers are twice as likely to use four or more channels (including mobile apps, online chats and text messaging) to get answers than those who don’t experience problems.

COVID-19 may be one factor here toward building that increased dissatisfaction. As J.D. Power noted, the U.S. insurance industry gave out “tens of billions of dollars” in refunds to consumers during the pandemic, but small business insurance coverage lacked any similar relief, and the absence of proactive support hurt.

“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,” Robert Lajdziak, senior consultant of insurance intelligence at J.D. Power, said in prepared remarks.

He added that small commercial customers are spending three times more effort interacting with their carrier on the website, on the phone or with agents. Small commercial clients who had workers comp coverage or commercial auto policies saw their customer service satisfaction decline the most, he added.

Other 2021 report highlights:

• 32 percent of customers reported they put in “a great deal of effort” to interact with their agent, up from 10 percent a year ago. For digital interactions, that jumped to 34 percent, versus 10 percent last year.

• 45 percent of customers said their carrier proactively reached out to them in 2021, versus 19 percent in 2020. According to J.D. Power, while the positive contact increased, the positive effect it had on customer satisfaction declined 31 points. The report suggested insurers “may have been too late in providing support to their customers.”

• 46 percent of customers who received proactive outreach said they are having more problems and/or billing issues in 2021, versus 26 percent in 2020.

For this year’s study, Allstate scored 848 in overall customer satisfaction out of 1,000 total points, ranking first among U.S. Small Commercial insurers. State Farm came in second at 846 and Erie Insurance ranked third at 845.

J.D. Power’s study – the ninth annual – is based on responses from 1,994 commercial insurance customers from March through June 2021. It looked at overall customer satisfaction among small commercial insurance customers with 50 or fewer employees, based on interaction, policy offerings, price, billing and payment, and claims.

Source: J.D. Power