Best Insurers for Small Businesses
Which commercial insurers are meeting the needs of small business owners? To answer that question, J.D. Power conducted a satisfaction survey in 2017. The survey was based on 3,312 responses from people who buy general liability or commercial property insurance on behalf of small businesses. The results showed that some insurers are doing a better job of satisfying small businesses than others.
Many insurers sell insurance designed for small companies. However, the insurance market is very soft, so companies are unable to compete on price. Thus, many insurers have tried to distinguish themselves by retooling their product offerings and improving customer service.
According to J.D. Power, the small business market is one of the best growth opportunities available for property/casualty insurers. Insurance companies can succeed in this market by fulfilling needs that aren't being met by their competitors.
Purpose of the Survey
J.D. Power's surveys are designed to assess the satisfaction of small business owners with their insurers. The goal is to determine what services business owners want, need and expect. The surveys also identify trends in the small commercial insurance industry. Survey participants are businesses with fifty or fewer employees. Business owners are asked to rate their insurers based on the following six factors:
- Overall Satisfaction. Overall satisfaction with every aspect of the services provided by their insurer
- Policy Offerings. Satisfaction with the variety of coverages their insurer offered and whether those coverages met their needs
- Price. Satisfaction with the price charged for the coverages offered (value)
- Billing and Payment. Satisfaction with insurer's billing and payment process. Were billing statements clear, accurate, and produced in a timely manner?
- Interaction. Satisfaction with insurer's communication, whether through an agent, a call center representative or the insurer's website
- Claims. Satisfaction with the claims process, including the insurer's procedures, adjusters, and claim settlements
J.D. Power tabulated the responses from participants of the 2017 survey. It then rated insurers on each of the six factors utilizing its Power Circle Ratings system. The system is a proprietary product of J.D. Power. It is designed to provide unbiased feedback from users of a product or service.
For each of the six survey items, J.D. Power assigned insurers a rating of two, three, four or five Power Circles. Insurers that provided greater satisfaction earned more circles. Here's what the numbers mean:
5 Power Circles - Among the best
4 Power Circles - Better than most
3 Power Circles - About average
2 Power Circles - The rest (below average)
In addition to power circles, J.D. Power assigned each insurer a numeric score based on a 1,000-point scale. This score reflects customers' overall satisfaction with the insurer. The scores ranged from 838 to 807, with an average of 825.
The following chart shows how the insurers fared in the survey. Note that the numbers 2, 3, 4 and 5 indicate the number of Power Circles assigned to the insurers. Three insurers (Acuity Group, Allianz/Fireman's Fund, and Cincinnati Insurance) were included in the survey but omitted from the ranking due to small sample sizes.
|Insurer||Score||Overall Satis.||Policy Offerings||Price||Billing & Payments||Interaction||Claims|
The survey winner was Farmers Insurance, a large stock insurer based in Woodland Hills, California. Farmers sells personal and commercial coverages through a combination of captive and independent agents. It provides business insurance to small companies in a variety of industries. Allstate earned second place, followed by Chubb, Erie, and AIG.
Customers Want Multiple Channels
This was J.D. Power's fifth consecutive satisfaction survey of small businesses. While overall customer satisfaction has increased since the previous (2016) survey, there is a gap between the smallest customers and their larger counterparts. J.D. Power found that satisfaction has increased by 13 points among larger businesses (11-50 employees) but declined by 18 points among smaller ones (5-10 employees).
The survey showed that small business owners prefer insurers that use multiple channels to distribute their products. Some customers want to interact with their insurance agents in person or via the telephone. Others like to conduct business online. Still others prefer to communicate by email, text messages, or a mobile app.
J.D. Power also found that customers want more options for self-service. The desire for self-service has increased by 28% since 2015. Savvy insurers will capitalize on this desire by providing the types of self-service tools customers want.