Risk Managers Very Pleased With Insurers

Despite the poor economy, persistently soft market and the insurance industry's chronic reputational challenges, buyers are basically happy with their commercial lines carriers, and most are unlikely to be seeking a change anytime soon, the inaugural “Risk Manager Choice Awards” survey revealed.

Indeed, the Web survey of 411 risk managers–conducted by the Flasp?hler Research Group, in partnership with National Underwriter–found that 45.8 percent are “very satisfied” and an additional 46.8 percent are at least “somewhat satisfied” when asked how they would rate their overall level of satisfaction with their commercial insurance providers.

None said they were “very dissatisfied,” and only 1.8 percent said they were even “somewhat dissatisfied” with their current carriers' performance.

Forty-five percent said their relationships overall with insurers are “improving,” while 49.4 percent said their relationships were “not really changing.” Only 5.7 percent described their carrier relationships as “declining.”

Those positive assessments are translating into long-term relationships, as 26.8 percent said they are “very unlikely” to consider replacing their current primary commercial lines writer in the next two years, while an additional 18.1 percent found that possibility “somewhat unlikely.”

Nearly 31 percent said that changing carriers in the next two years is “neither likely nor unlikely.” Moving their account to a new carrier is “somewhat likely” for 20.4 percent of those surveyed, but only 3.8 percent said such a step is “very likely.”

While insurers and brokers often complain about price-sensitive buyers, the survey found risk managers willing to pay more to do business with a carrier they like.

Indeed, over half–57.5 percent–of those surveyed said they would “consider paying a higher premium to use a specific commercial insurance provider” if they received “superior service” from that carrier.

In addition, 51.7 percent said they would go with an insurer if they enjoyed a “strong existing relationship” with the carrier.

However, 12.5 percent said they “would never pay a higher premium” to use a particular insurer. (See the accompanying infographic for additional reasons why a buyer might be willing to pay more to work with a specific carrier.)

Among those surveyed, only one-quarter said their organization has an “approved list” of commercial insurers that they refer to, or direct their brokers to use. Seventy-five percent have no such list.

While nearly half of the risk managers responding to the survey said they “primarily rely” on the A.M. Best Company rating agency for “information about the creditworthiness” of their insurers, nearly one-third said they depend on their brokers for that assessment.

Those surveyed report overwhelming use of the country's top-four brokers: Marsh (35.4 percent), Aon (33.8 percent), Willis (24.8 percent) and Gallagher (14.8 percent). The totals add up to more than 100 percent since many of the risk managers responding use more than one broker for their account.