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Insurer profitability, broker expertise key drivers of customer satisfaction: J.D. Power
Among large commercial insurers, a distinct correlation is found between customer satisfaction and insurer profitability, study finds.
Staff on December 6, 2016
The key variables driving overall commercial insurance customer satisfaction are insurer profitability and broker expertise, according to the J.D. Power 2016 Large Commercial Insurance Study. The highest-performing broker in this year’s study is Lockton. The highest-performing insurer in this year’s study is XL Catlin.
The study, now in its third year, measures customer satisfaction with commercial insurers and insurance brokers. Commercial insurer satisfaction is based on five factors: service interaction; program offerings; price; billing process; and claims. Satisfaction with commercial insurance brokers is based on 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; and claims process. The study was conducted in conjunction with RIMS.
Among large commercial insurers, a distinct correlation is found between customer satisfaction and insurer profitability, as measured by total commercial combined financial ratios1. The highest-performing companies in overall satisfaction—XL Catlin (773 on a 1,000-point scale); CNA (767); and Chubb (765)—are also found to have among the industry’s strongest combined ratios, suggesting that the most profitable insurers are able to support more flexible underwriting standards to meet customer needs more effectively. Overall, J.D. Power finds a 0.67 correlation between customer satisfaction and insurer profitability.
Among commercial insurance brokers, the highest-performing firms, Lockton (863) and Arthur J. Gallagher & Co. (823), outperform larger rivals by a large margin. The most significant single attribute driving that performance is quality of advice/guidance provided, demonstrating for the second consecutive year 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. The study also shows the inverse to be true. Among the 20% of customers who indicate their broker does not completely understand their business needs, satisfaction declines by an average of 136 points.
“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, in a release. “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.”
Insurer profitability, broker expertise key drivers of customer satisfaction: J.D. Power
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