Small Commercial Insurance Customer Retention Hinges on Trust in Rising Rate Environment, J.D. Power Finds
American Family Ranks Highest among Small Commercial Insurers
Even in an environment of rising rates in which 36% of small business owners have experienced premium increases during the past year, overall customer satisfaction, loyalty and brand advocacy stay strong when customers trust their commercial insurance providers. According to the
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“Trust is the single most important variable in the customer relationship with commercial insurance providers,” said
Following are some key findings of the 2024 study:
- Trust is key value driver for commercial insurers: Overall small business customer satisfaction with commercial insurers is 697 (on a 1,000-point scale). Among customers who have the highest levels of trust in their insurance providers, overall satisfaction jumps 180 points to 877. Similarly, 81% of customers with the highest levels of trust say they “definitely will” renew with their carrier and 79% say they “definitely will” recommend their carrier.
- Trust varies widely among small commercial insurers: A 77-point gap separates the insurer with the highest overall trust score from the insurer with the lowest trust score. Insurers that achieve the highest levels of trust perform well on helping their customers understand policy coverage, understand their business needs and personalize products to their specific business needs.
- Premium increases rising: Overall, 36% of small businesses experienced a premium increase this year, up from 34% in 2023. Of those, 51% of increases were initiated by the insurer, 16% were the result of changing business needs and 13% were due to a change the customer made to their policy.
- Understanding reasons for premium increases critical to maintaining trust: When customers completely understand the reasons for a premium increase, trust is 142 points higher than when they do not understand. Notifying customers in advance, particularly via phone and/or in person, and proactively discussing ways to reduce the increase will help customers understand the reasons and build trust.
- Know your customer: Personalization has become a key driver of commercial insurance customer satisfaction, but nearly half of customers are not receiving it. Overall, 55% of commercial insurance customers say they’ve received information personalized to their business from their insurer, which in turn drives an average overall trust score of 761. Overall trust is 106 points lower (655) among the 45% of businesses for which insurance information is not personalized.
Study Ranking
American Family ranks highest in overall customer satisfaction with a score of 727.
The
For more information about the
See the online press release at http://www.jdpower.com/pr-id/2024087.
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