Independent insurance brokers are rated more highly by large business commercial insurance customers than any other commercial lines insurer, a new report from J.D. Power and RIMS reveals.
The first-of-its-kind report asked risk managers with large businesses ($100 million or more in annual revenue or operating budget) in the US and Canada to identify best practices among commercial insurance brokers and carriers, and to rate their satisfaction with brokers and carriers operating in workers’ compensation, auto insurance and commercial property.
Brokers came out on top, with an overall satisfaction score of 854. Property insurers followed with a score of 821, then auto (811) and workers’ compensation (746).
Broker satisfaction was evaluated on four factors: ease of contacting, reasonableness of fees, advice and guidance in selecting program offerings and timeliness of resolving contact.
One particularly key performance metric among brokers was providing at least two in-person interactions each year. Eighty-one percent of customers said they have at least two in-person interactions with their broker, and overall satisfaction declined by 73 points among those who say they did not have these interactions.
Timothy Bebout, commercial insurance practice leader at J.D. Power, said the survey results act as ‘a testament to the value the agent brings to risk managers.”
“The results really drive home the importance of the service aspect among brokers,” Bebout told Insurance Business. “There was a high degree of satisfaction among brokers because of the responsiveness of the brokerage community and their knowledge of the business.”
One area in which brokers may need improvement is in their handling of enterprise risk management (ERM), which the report identifies as “a more prevalent risk management function” at many large organizations.
This is especially true among risk managers who hold ERM responsibilities for the company — a number reaching nearly 40%. Among risk professionals with ERM responsibilities, overall satisfaction with both brokers and insurers on ERM is a low 541.
“The report findings suggest that risk professionals who are responsible for ERM are underserved by insurers and brokers in this area,” Bebout said. “There is an opportunity for insurers and brokers to provide greater support and resources to customers in organizations that use ERM practices.”
Other key findings in the J.D. Power/RIMS report include:
• Price is the leading factor driving satisfaction among auto customers;
• Interaction is the second-most important factor in determining overall customer satisfaction with insurers across product lines. It accounts for nearly one-fourth of the overall model used in each product line index; and
• Claims frequency significantly influences overall customer satisfaction; as claims frequency increases, customer satisfaction decreases. Ensuring an insurance representative, such as an engineer or underwriter, is involved in the claims process positively influences customer satisfaction.