What do small businesses think of Allstate, State Farm and top insurers?

What do small businesses think of Allstate, State Farm and top insurers?

Small business insurance customers are feeling neglected by their insurers, according to a new study by J.D. Power.

The US insurance industry handed out billions of dollars in refunds to customers during the COVID-19 pandemic. However, since coverage wasn’t affected, small business insurance customers didn’t see any of that relief. That lack of proactive support and attention put a significant dent in customer satisfaction, according to J.D. Power’s 2021 U.S. Small Commercial Insurance Study.

“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. The largest declines in the study are among customers who had workers’ comp coverage or commercial auto policies. Carriers will want to pay particular attention to customers with these types of policies.”

Key findings of the study included:

  • Interactions drive decline: Customer satisfaction has fallen 15 points in the past two years – a seven-point drop in 2021 and an eight-point decline in 2020. These represent the only declines in the history of the study, J.D. Power said. Satisfaction with interactions dove 20 points year over year.
  • Customer effort to interact with agents is three times higher than in 2020: Customers who said they had to go to a great deal of effort to interact with their agent spiked to 32%, from 10% in 2020. Digital interactions fared no better, spiking from 10% in 2020 to 34% in 2021.
  • Positive outreach too little, too late: In 2020, only 19% of customers said their carrier proactively reached out to discuss business needs related to the COVID-19 pandemic. While proactive contact rose to 45% in 2021, the positive effect it had on customer satisfaction plummeted by 31 points, indicating that insurers may have been too late in providing support for their customers.
  • Mixed messages: While proactive outreach still had a positive effect, carriers need to ensure that they are communicating accurate information, J.D. Power said. Among customers who received proactive outreach from their insurers, more cited problems and/or billing issues in 2021 (46%) than in 2020 (26%).
  • Scrambling for answers: Customers who experienced problems or billing issues were using multiple channels, like mobile apps, online chat and text messaging, to get answers to their questions. Those customers were nearly twice as likely to use four or more channels as those who didn’t experience problems.

Read next: J.D. Power: Pandemic gave auto insurers ‘breathing room’ to refine customer experience

Allstate ranked highest in overall customer satisfaction, with a score of 848 on a 1,000-point scale. State Farm ranked second with a score of 846, while Erie Insurance ranked third with 845.