Customer satisfaction is an important ingredient for any successful business.
A new survey has found that the single most critical factor between a customer and a commercial insurance broker is the quality of advice and guidance provided. For commercial insurers, the same study concluded that the more profitable the book of business an insurer has, the greater the likelihood that the insurer will also have high levels of customer satisfaction.
The J.D. Power 2016 Large Commercial Insurance Study, now in its third year, was conducted in conjunction with RIMS, the not-for-profit organization with a membership of more than 11,000 risk management professionals located in more than 60 countries.
'Customer experience has become the X factor'
Rates across the U.S. commercial property and casualty insurance market continue to decline in 2016, according to J.D. Power and MarketScout. Lower rates in commercial property, general liability, and workers’ compensation contribute to the overall decline.
Total commercial insurer loss ratios in 2014 and 2015 were at the lowest levels over the past six years. The study concludes that focusing on the customer experience will be critical to retaining business and deepening relationships with risk professionals and brokers.
“As rates across the U.S. commercial property and casualty insurance market continue to decline, delivering an exceptional customer experience has become the X factor that levels the playing field and opens up new growth opportunities for commercial insurers and brokers,” said Greg Hoeg, vice president of the U.S. insurance practice at J.D. Power. “With the potential for rate volatility in 2017 and beyond now increasing, keeping a laser focus on customer satisfaction will be a critical driver of success.”
About the study
The study is based on responses from more than 1,400 risk professionals or employees who provide oversight for their organization or are members of their organization’s risk management team. Organizations included in the study have at least $100 million in annual revenue or operating budget and have purchased a commercial insurance policy from one of the profiled insurers or brokers.
Here are the J.D. Power commercial insurance broker and insurer rankings for 2016:
In-depth expertise, hands-on relationship
Among commercial insurance brokers, the highest-performing firms for customer service outperform larger rivals by a large margin.
The most significant single attribute driving that performance is quality of advice and guidance provided, demonstrating that brokers who have an in-depth expertise and establish a hands-on, consultative relationship with their clients are consistently driving the highest levels of customer satisfaction.
Each broker's total score (based on a 1,000-point scale) is based on the following nine attributes:
- Quality of advice and guidance provided.
- Reasonableness of fees.
- Ease of the renewal process.
- Effectiveness of risk control services.
- Variety of program offerings.
- Effectiveness of program review.
- Price, given services received.
- Billing and payment process.
- Claims process.
Top 5 large commercial insurance brokers
Overall broker customer satisfaction index rankings (total score noted in parentheses):
1. Lockton (863)
Lockton has the highest ratings in all 9 of the attribute ratings comprising the Broker Index. Quality of the advice provided — the most important attribute comprising the index — is a key competitive strength for Lockton (8.89 on a 10-point scale).
2. Arthur J. Gallagher (823)
3. Aon (811)
4. Willis Towers Watson (801)
5. Marsh (789)
Flexible underwriting standards
Among large commercial insurers, a distinct correlation is found between customer satisfaction and insurer profitability. The highest-performing companies in overall satisfaction suggest that the most profitable insurers are able to support more flexible underwriting standards to meet customer needs more effectively.
Commercial insurer satisfaction (based on a 1,000-point scale) is based on five factors:
- Service interaction.
- Program offerings.
- Billing process.
Top 11 large commercial insurers
Overall insurer customer satisfaction index rankings (total score noted in parentheses) :
1. XL Catlin (773)
XL Catlin ranks highest among award-eligible large commercial insurers in 2016. The insurer achieves the highest score among award-eligible insurers in the program offerings and price factors. Interaction is also a key strength for XL Catlin.
2. CNA (767)
3. Chubb (765)
4. Berkshire Hathaway (763)
5. Ace (761)
Note: Ace and Chubb are now one company.
6. Travelers (756)
7. Hartford Financial Services Group (752)
8. Zurich (752)
9. Tokio Marine (742)
10. Liberty Mutual (739)
11. American International Group (730)