Small Business — Keeping Your Small Business Clients

J.D. Power’s 2025 U.S. Small Commercial Insurance Study has good news for their insurers. The study found 55% of those surveyed will definitely renew their commercial policies with their current insurer.

While that’s good news, the bad news has it down 6% from the 2024 study.

The study is done with commercial insurance customers having 50 or fewer employees. The J.D. Power study rates insurers on trust, prices, product coverage options, the ease of doing business, problem resolution and digital channels.

J.D. Power’s managing director of global insurance intelligence, Stephen Crewdson said customer loyalty is being pushed hard by rising premiums. But that’s not the only reason. Crewdson said 16% of customers say a positive service experience will keep them with their current insurer.

And that — to many of them — is more important than price, coverage options and/or reputation.

“Interestingly, the drop in retention is not solely attributable to higher premiums,” Crewdson said. “In fact, insurers that communicate well and provide a higher level of service can make huge inroads toward keeping customers.”

He added that satisfaction is at the same level for both customers seeing a premium increase and customers not seeing one at all.

Here’s more:

• Client retention dropped significantly on all demographic groups
• Client retention for millennials dropped the most, down 12%
• 16% said good service is the most common reason they stay with an insurer
• Good customer service tops price, coverage options and reputation
• Communication about rate increases is critical in the retention of customers
• Satisfaction for communication on 1,000 point scale is 722 among customers getting an increase and those not
• Understanding of getting an increase, and it’s okay, fell 5%

Another key in retention is an insurer, agent and agency understanding a customer’s business or industry. Understanding also works both ways:

• Understanding a customer’s business or industry improves renewal 37% year-over-year
• A customer understanding the policy is a plus 33%
• Understanding the reason for an increase is plus 26%
• Problem-solving is a 23% positive

Source link: Insurance Journal — https://bit.ly/4fULe9n