How satisfied are small businesses with commercial insurance providers?

New study reveals "important variations" in customer satisfaction

By Steven Byerley

Aug 23, 2023 Share

Despite the challenges posed by rising interest rates and strained business conditions, small businesses in the United States are reporting higher levels of satisfaction with their commercial insurance providers, according to a new study by J.D. Power.

According to the recently released J.D. Power 2023 U.S. Small Commercial Insurance Study, overall customer satisfaction has reached a record high of 847 on a 1,000-point scale. This marks a significant improvement from previous years, with customers noting substantial year-over-year progress in three out of the five factors evaluated in the study.

“Contrary to what we’ve seen in personal lines insurance, small business customer satisfaction keeps rising even as premiums have continued to climb,” said Stephen Crewdson, senior director of global insurance intelligence at J.D. Power. “While the overall satisfaction numbers are high, there are some important variations based on the size of the small business.

“The trend is really being driven by businesses in the ranges of five to 10 employees and 11-50 employees, as opposed to the micro businesses with fewer than five employees. That variation should inform more targeted small business strategies on the part of insurers.”

Key findings

Customer satisfaction reaches an all-time high: Overall customer satisfaction among small businesses with commercial insurers has risen to 847, a five-point increase from 2022 and a 70-point increase over the past decade, J.D. Power reported. Satisfaction has improved across all factors evaluated in the study, with claims, price, and interaction leading the way.
Smallest small businesses exhibit lower satisfaction: While overall satisfaction has increased for all categories of businesses examined in the study, micro businesses with fewer than five employees have a lower satisfaction score (823) compared to medium-sized (855) and larger (857) small businesses.
Proactive communication mitigates the impact of rising premiums: Insurers that engage in proactive discussions with small business customers regarding price changes and collaborate with them to minimize increases in premiums have seen improved overall customer satisfaction, the report found. Among the 36% of customers who made changes to their coverage to mitigate price increases, satisfaction with policy prices increased by 84 points. Additionally, among the 25% of customers who made changes to their business practices to reduce risk, price satisfaction increased by 135 points.
Social media plays a crucial role in communication: Small businesses express a strong interest in receiving tips on cost reduction, information about new products, and updates on state and federal regulations through social media. Micro business customers who follow their insurers on social media exhibit an overall satisfaction score that is 88 points higher than those who do not.

Read next: 12 types of business insurance policies you should consider

Notable rankings

Nationwide ranks highest in overall customer satisfaction with a score of 883, according to the report. State Farm (877) secures the second position, followed by Cincinnati Insurance (870) in third place.

The 2023 U.S. Small Commercial Insurance Study collected responses from 2,472 small commercial insurance customers. Conducted annually for the past 11 years, the study focuses on customer satisfaction among small businesses with 50 or fewer employees.

Overall satisfaction is determined by evaluating five factors: billing and payment, claims, interaction, policy offerings, and price. The study was conducted from March to June 2023.

Another recent study by J.D. Power found that nearly a third of auto insurance customers had seen a rate hike in the past year. The company also found that customer satisfaction with auto insurers has plummeted to record lows.

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