Customer Satisfaction Declines for Second Consecutive Year as Insurers Fall Short on Soft Skills

The U.S. insurance industry doled out tens of billions of dollars in refunds to customers during the COVID-19 pandemic but, since coverage was not affected, there was no such relief to be had for small business insurance customers. According to the J.D. Power 2021 U.S. Small Commercial Insurance Study℠ released today, that lack of proactive support and personalized attention has put a strain on customer satisfaction, causing scores to fall significantly for a second consecutive year.

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J.D. Power 2021 U.S. Small Commercial Insurance Study (Graphic: Business Wire)

“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.”

Following are some key findings of the 2021 study:

• Interactions drive decline: Customer satisfaction has declined 15 points in the past two years—a 7-point decline from a year ago and an 8-point decline in 2020 from 2019. These represent the only declines in the study’s history. Satisfaction with interactions shows a 20-point decline from a year ago.

• Customer effort to interact with agent is three times higher than 2020: Customers who say they had to exert a great deal of effort to interact with their agent increases to 32% from 10% a year ago. Digital interactions were no less immune, increasing to 34% from 10% year over year.

• Proactive outreach too little, too late: In 2020, only 19% of customers indicated their carrier proactively reached out to them to discuss business needs related to COVID-19. While proactive contact significantly increases to 45% in 2021, the positive effect it has on customer satisfaction declines 31 points, which indicates insurers may have been too late in providing support to their customers.

• Mixed messaging in communication: While proactive outreach still has a positive effect, carriers need to ensure the information being communicated is accurate across channels and documents. Among customers who received proactive outreach from their insurer are citing more problems and/or billing issues in 2021 (46%) than in 2020 (26%).

• Scrambling to get answers: Customers experiencing problems and/or billing-related issues are using multiple channels—such as mobile app, online chat and text messaging—to get answers to their questions. These customers are nearly twice as likely to use four or more channels than those who don’t experience problems.

Study Ranking

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

The 2021 U.S. Small Commercial Insurance Study is based on responses from 1,994 small commercial insurance customers. The study, now in its ninth year, examines overall customer satisfaction among small commercial insurance customers with 50 or fewer employees. Overall satisfaction is comprised of five factors (in order of importance): interaction; policy offerings; price; billing and payment; and claims. The study was fielded from March through June 2021.

For more information about the J.D. Power U.S. Small Commercial Insurance Study, visit

https://www.jdpower.com/business/insurance/us-small-commercial-insurance-satisfaction-study

To view the online press release, please visit http://www.jdpower.com/pr-id/2021099.

About J.D. Power

J.D. Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, J.D. Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world's leading businesses across major industries rely on J.D. Power to guide their customer-facing strategies.

J.D. Power has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The J.D. Power auto shopping tool can be found at JDPower.com.

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