FEELING THE LOVE, BUT NOT SHOWING IT
Are agents and brokers coming up short as “primary care providers” to small business?
By Joseph S. Harrington, CPCU
Bloggers like to think that what they post will make a deep impression on readers, even though a posting amounts to a mere teaspoon in an ocean of online content.
A little more than a year ago, Coverage Concerns featured a blog posting about a study by The Hanover and Forbes Insights that found that, despite technological transformations in insurance buying, small businesses still relied heavily on human agents to select coverage. The report vindicated the value of personal insurance counselors, at least in commercial lines, making the future look bright for agents and brokers.
While lingering pandemic conditions almost certainly contribute to buyer dissatisfaction, the … causes and the cure are within the control of producers and their carriers.
Yet, however bright the future may be, two recent reports from J.D. Power and Associates suggest insurance producers and carriers are not capitalizing on the opportunities presented by small commercial accounts.
In a December 2020 report, J.D. Power, a renowned leader in customer satisfaction research, found that satisfaction among small commercial lines accounts had declined for the first time in the eight years that it had been studying small business insurance.
It’s not surprising that small businesses would have been disappointed with their insurance in 2020, given that most of them had no coverage for pandemic-related business interruption losses. But the level of satisfaction continues to fall, according to an August 2021 follow-up report by the research firm.
While lingering pandemic conditions almost certainly contribute to buyer dissatisfaction, the reasons cited by J.D. Power in its latest report suggest that the causes and the cure are within the control of producers and their carriers.
Among the causes of dissatisfaction cited by J.D. Power are too little outreach by insurance providers, too much effort required to interact with providers, and confusion and lack of clarity in communication.
Primary care providers
To set themselves apart from competitors, it may help if agents and brokers imagine their role today as analogous to primary care physicians who monitor the overall health of patients and refer them to specialists as specific needs arise.
Insurance producers once added value as gateways to insurance products with their unique ability to submit applications, negotiate rates, and bind coverage. This aspect of service hasn’t disappeared, but its relative value declines with advances in online quoting.
As that happens, and as carriers offer more products for more exposures—cyber, employment practices, reputation, violent acts, and more—ever more opportunities are created for producers to provide individualized advice on what coverage to buy, how much of it, and under what terms.
It follows that, to quote Robert M. Lajdziak, J.D. Power’s senior consultant of insurance intelligence, “proactive communication—when an insurer reaches out to a business owner and offers guidance and help—has proven to lift satisfaction scores, even when customers are under significant financial duress.”
Like a primary care physician, today’s agents and brokers can be knowledgeable and indispensable counselors to small business accounts, provided they can take heed of what J.D. Power reports and respond appropriately.
Joseph S. Harrington, CPCU, is an independent business writer specializing in property and casualty insurance coverages and operations. For 21 years, Joe was the communications director for the American Association of Insurance Services (AAIS), a P-C advisory organization. Prior to that, Joe worked in journalism and as a reporter and editor in financial services.