Small businesses rely on independent agents and brokers who act as risk advisors and have a deep understanding of their businesses—and rank insurers on the breadth and quality of their policy offerings, according to the J.D. Power 2013 U.S. Small Business Commercial Insurance Study.
Based on responses from nearly 4,000 insurance decision makers at small companies (those with fewer than 50 employees), the inaugural study examines overall customer satisfaction, insurance shopping and purchase behavior among these buyers.
Overall satisfaction with the insurance-buying experience was based on five factors (in order of importance): interaction, policy offerings, price, billing and payment, and claims.
Key findings include:
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On a 1,000-point scale, overall small-business customer satisfaction is 777, which increased to 835 when an agent or broker understands their business and provides guidance regarding risk.
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Policy offerings, not price, determine how small businesses select an insurer.
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Buyers who stay with their insurer for more than two years base their decision on the level of service.
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Buyers were most satisfied with their agent interaction when communication was in person (854), compared with 819 when communication was via e-mail.
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Customer satisfaction was highest among small businesses with 11 to 50 employees, with higher scores influenced by agents and brokers spending more time in person with these key accounts.
On the insurer side, policy offerings are the most important driver of customer retention, especially for small businesses with 11 to 50 employees. The higher the employee count, the more important product selection becomes. Nearly two-thirds (62%) of small businesses with 11 to 50 employees indicate policy offerings are a leading reason for retaining business with their insurer, compared with 50% of businesses with fewer than five employees.
Respondents also ranked individual insurers on interaction, policy offerings, price, billing and payment, and claims. Erie Insurance ranked highest among small business commercial insurers, with a score of 808. Erie performs particularly well in the interaction and policy offerings factors.
American Family and Nationwide tie for second overall at 794 each. American Family performs particularly well in price, while Nationwide performs well in billing and payment. Included in the study, but not ranked due to small sample size, are Cincinnati Insurance and Philadelphia Insurance Co.
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