How Commercial Insurance Customers Rate Large Carriers, Brokers
Overall customer satisfaction with large commercial insurers has increased in 2017, driven primarily by insurers’ focus on more tailored and diversified products for their customers. That’s according to the J.D. Power 2017 Large Commercial Insurance Study that measures customer satisfaction with commercial insurers and insurance brokers based on the opinions of 2,500 risk professionals.
Also, demonstrating an understanding of customers’ business needs is one of the most significant performance metrics for large commercial insurers, according to the study.
The study, now in its fourth year, measures satisfaction with commercial insurers using five factors: service interaction; program offerings; price; billing process; and claims. Satisfaction with commercial insurance brokers is based on nine attributes: quality of advice and guidance provided; reasonableness of fees; ease of the renewal process; effectiveness of risk control services; variety of program offerings; effectiveness of program review; price, given services received; billing and payment process; and claims process. The study was conducted in conjunction with RIMS (the Risk and Insurance Management Society).
According to the results, on a 1,000 point scale, XL Catlin ranks highest among large commercial insurers with a score of 806. Chubb ranks second with a score of 783 and The Hartford ranks third with a score of 772.
Lockton ranks highest among large commercial insurance brokers with a score of 856. Arthur J. Gallagher & Co. ranks second with a score of 855 and Aon ranks third with a score of 822.
“Amid a sustained period of stagnant rates, top-performing large commercial insurers have set themselves apart from the competition by offering a wider variety of coverage options and services to meet the specific risk needs of their customers,” said David Pieffer, P/C Insurance Practice Lead at J.D. Power. “While we expect rates to start rising in certain catastrophe-exposed lines for 2018 after the heavy catastrophic losses experienced during the 2017 hurricane season, the customer expectation for tailored product offerings has now become a critical part of the business insurance product mix.”
Some findings of the study:
- Variety of program offerings drives overall increase in customer satisfaction: Overall customer satisfaction with large commercial insurers is 761 (on a 1,000-point scale), up 7 index points from 2016. The overall improvement is largely due to a 10-point increase in satisfaction with program offerings.
- Cyber insurance presents challenges, opportunity: P&C insurers wrote $1.35 billion in premiums for cyber insurance in 2016, a 35% increase from 2015. Yet, data breach/cybercrime programs are among the lowest-rated programs in 2017, averaging 7.56 on a 10-point scale. Among top concerns of commercial insurance customers are gaps related to security; loss prevention and risk control; business interruption; and remediation.
- Commercial insurance customers less likely to become brand advocates: Net Promoter Scores, which measure the likelihood that a customer will recommend a product or service, are much lower among commercial insurance customers than they are for services such as business utilities or personal auto insurance.
- Understanding business needs makes big impression: Demonstrating an understanding of customers’ business needs is one of the most significant performance metrics for large commercial insurers, and is associated with a 141-point improvement in customer satisfaction among those who say their insurer completely understands their business vs. those who say their insurer does not understand or only partially understands their businesses (827 vs. 686, respectively).
The 2017 Large Commercial Insurance Study is based on 2,506 evaluations from risk professionals or employees who provide oversight for their organization 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 purchased a commercial insurance policy from one of the profiled insurers or brokers.