‘Hey, Insurance Industry: What About Us?’ Ask Small Businesses as Satisfaction Wanes

September 6, 2021

Insurance carriers and agents may want to pay more attention to small business insurance customers, especially those with commercial auto and workers’ compensation policies. They’re feeling neglected.

According to the J.D. Power 2021 U.S. Small Commercial Insurance Study a lack of proactive support and personalized attention has put a strain on customer satisfaction among small commercial insurance customers. The small business J.D. Power insurance satisfaction scores have fallen significantly for a second consecutive year.

Small commercial lines customer satisfaction has declined 15 points in the past two years — a 7-point decline from a year ago and an 8-point decline in 2020 from 2019. These represent the only declines in the study’s 9-year history. Satisfaction with interactions shows a 20-point decline from a year ago.

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

The study examines overall customer satisfaction among small commercial insurance customers with 50 or fewer employees.

Lajdziak said small commercial customers “spend three times more effort” interacting with their carrier on websites, on the phone or with agents. The largest declines in the study are among customers who had workers’ compensation coverage or commercial auto policies.

“Carriers will want to pay particular attention to customers with these types of policies,” he said.

While insurers doled out tens of billions of dollars in refunds to personal lines customers during the COVID-19 pandemic, small business insurance customers got no relief since their coverage was not affected. However, they took notice and felt ignored, the survey suggests.

Some other findings of the 2021 study:

  • Customer effort to interact with agent is three times higher than 2020: Customers who say they had to exert a great deal of effort to interact with their agent increases to 32% from 10% a year ago. Digital interactions were no less immune, increasing to 34% from 10% year over year.
  • Proactive outreach too little, too late: In 2020, only 19% of customers indicated their carrier proactively reached out to them to discuss business needs related to COVID-19. While proactive contact significantly increases to 45% in 2021, the positive effect it has on customer satisfaction declines 31 points, which indicates insurers may have been too late in providing support to their customers.
  • Mixed messaging in communication: While proactive outreach still has a positive effect, carriers need to ensure the information being communicated is accurate across channels and documents. Among customers who received proactive outreach from their insurer are citing more problems and/or billing issues in 2021 (46%) than in 2020 (26%).
  • Scrambling to get answers: Customers experiencing problems and/or billing-related issues are using multiple channels — such as mobile app, online chat and text messaging — to get answers to their questions. These customers are nearly twice as likely to use four or more channels than those who don’t experience problems.

In this year’s survey results, Allstate ranked highest in overall customer satisfaction with a score of 848 (on a 1,000-point scale). State Farm (846) ranked second and Erie Insurance (845) ranked third.

The study is based on responses from 1,994 small commercial insurance customers. Overall satisfaction is comprised of five factors (in order of importance): interaction; policy offerings; price; billing and payment; and claims. The study was fielded from March through June 2021.