A Shift to Service, Away From Price?

According to the U.S. Small Commercial Insurance Study, after three years of declining rates, insurance providers are no longer able to compete primarily on price and are now focusing their efforts on ways to please their customers. The payoff is a significant increase in satisfaction among their small business commercial customers, with a 30-point improvement in overall satisfaction in 2016, to 823 on a 1,000-point scale, up from 793 in 2015. The study, now in its fourth year, examines overall customer satisfaction and insurance shopping and purchasing behavior among small business commercial insurance customers with 50 or fewer employees. Overall satisfaction is composed of five factors (in order of importance): interaction; policy offerings; price; billing and payment; and claims. This marks the third consecutive year when satisfaction has improved. The study finds that interaction improved the most among all study factors, increasing 32 index points from 2015. Within that factor, website performance showed the largest jump year over year (up 36 points), followed by agent/broker (up 34) and call center (up 28). Interaction is driving the overall increase in satisfaction. This is the only J.D. Power insurance study in which Gen Y is the most satisfied generation. As expected, Gen Y businesses have been operating for a much shorter time, but they typically have higher revenues than the businesses of their baby boomer counterparts (51% of Gen Y business customers report annual revenue of more than $500,000, compared with 42% of baby boomers). The study found that American Family, Allied and Nationwide hold the top three positions in terms of satisfaction. Find more on the study here.