Surprising new results from a JD Power report suggest small business owners may have different preferences when it comes to who insures their business and employees. While producers may be tempted to place these accounts with commercial lines-focused carriers, clients themselves tend to prefer insurers who primarily write personal lines.
Even more concerning for producers is that those personal lines insurers tend to distribute through captive agencies.
Based on a 1,000-point scale, business owners with fewer than 50 employees gave personal lines carriers like
Allstate or
State Farm a satisfaction score of 804. That’s in comparison to an average score of 766 with traditional commercial lines insurers like
CNA Insurance or
Zurich.
“While both groups show year-over-year improvement, insurers that predominantly write personal lines insurance benefit from the personal relationships they are better able to build with their small-business customers,” said Jeremy Bowler, senior director of JD Power’s insurance practice.
“The relationship is typically established early because small-business owners often purchase commercial insurance from the same agent that provides their home and auto insurance. Additionally, the agent is often local, so they have more personal contact with their customers and better understand their business.”
In fact, a full 41% of clients of personal lines insurers first had their personal insurance with the carrier before addition commercial lines. The opposite—moving from commercial lines to personal—happened much less frequently (12%).
Overall, satisfaction among small business owners with their carrier is up in 2014, with an average 783—6 points greater than in 2013.
Erie Insurance ranked the highest among small-business commercial insurers, followed by
Nationwide, State Farm and Allstate. The
Hartford, CNA Insurance and
Travelers ranked near the bottom.
Image source: JD Power
You may also enjoy: "Small businesses reveal top risk concerns for 2014"
"Large versus small agencies: Who's got the edge?"
"Opinion: Small business picks up Obamacare tab"
