October 4, 2021

Service in Fast Decline in Small Business Insurance

What happened to the personalized service that small business insurers used to be famous for? Has the current state of affairs and surplus of busy work put distance between policy and client? Some seem to argue so.

A recent J.D. Power 2021 U.S. Small Commercial Insurance Study cited some interesting results. The study finds that lack of proactive support and personalized attention has hurt customer satisfaction, causing these scores to drop significantly for two years in a row.

“We see a real pattern of small business insurers missing the mark on  soft skills, such as interaction with agents…

“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. “There’s also a trend in which small commercial customers spend three times more effort interacting with their carrier on the website, on the phone or with agents…” he added.

Key findings of the 2021 study:

  • Interactions drive decline: 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 history. Satisfaction with interactions shows a 20-point decline from a year ago.
  • 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.

For more information about the J.D. Power U.S. Small Commercial Insurance Study, visit
https://www.jdpower.com/business/insurance/us-small-commercial-insurance-satisfaction-study

 

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