Using the P&C insurance market in the center of a gentle or stagnant cycle, insurance companies are battling to compete on cost. As commercial insurance costs still rise, insurers and brokers are deploying new tactics to satisfy customers’ needs and them on side.
Offering best-in-class customer support is a avenue insurance agencies have used to distinguish themselves. However, the current J.D. Power 2018 US Small Commercial Insurance Study shows that some carriers and brokers are now being selective and aligning their service levels to expectations of account profitability. Essentially, they’re catering mostly to bigger accounts since the revenue in play is a lot greater, and often completely ignoring small , micro-sized accounts.
The research notes that overall insurance satisfaction among small commercial firms has continued to be stagnant in 2018 from 2017 (825 on the 1,000-point scale). David Pieffer, J.D. Power’s Property & Casualty Insurance Practice Lead, attributes this stagnation to degeneration in commercial insurance prices offsetting any positive customer support changes insurers and brokers have introduced.
“To remain competitive, insurers and brokers must accelerate their customer experience efforts, especially regarding service interaction and cost,” he stated. “Specifically, we discovered that if brokers explain rate increases to customers personally, satisfaction is 100 points greater than individuals who have been informed via email, because they better understood why. Individuals simple personal touches and a focus goes a lengthy way with small commercial customers.
“This kind of customer interaction is especially relevant for smaller sized commercial clients since the insurance purchase is frequently a lot more personal on their behalf. They may have budgeted for any 5% rate increase however when they’re slapped having a 7% increase, their whole finances are tossed off for that quarter or even the year. A little commercial customer does not have the standard leverage using the carrier like a large commercial customer may have.”
A lot of the small company world consists of firms with 10 or fewer people – and nearly half of this group has become home-based business. For a lot of small commercial clients, the road between personal and commercial insurance purchases has become quite blurred, especially according to the amounts of service they might require using their insurance firms.
“I would encourage brokers to consider the way they communicate with personal lines customers and produce that very same degree of focus on small commercial clients,” Pieffer told Insurance Business. “They may use digital tools to boost the private connection and the interaction open through any means possible.”