Trust Matters

When it comes to small business owners and their insurance providers, trust matters. So do personalized relationships.

Even in an environment of rising rates in which 36% of small business owners have experienced premium increases during the past year, overall customer satisfaction, loyalty and brand advocacy stay strong when customers trust their commercial insurance providers.

That’s according to the J.D. Power 2024 U.S. Small Commercial Insurance Study, which found that small businesses with the highest levels of trust in their insurers stick around. The study showed that 81% of small businesses will “definitely” renew with their same carrier and 79% say they “definitely will” recommend their carrier.

J.D. Power noted that overall trust levels do vary widely by insurer.

“Trust is the single most important variable in the customer relationship with commercial insurance providers,” said Stephen Crewdson, senior director of global insurance intelligence at J.D. Power. “Across virtually every business metric that matters to insurers — customer loyalty, advocacy, premium retention, share of wallet — small business owners who trust their insurers represent significantly higher value. While some insurers are doing a great job cultivating that trust, others have a lot of work to do.”

Overall small business customer satisfaction with commercial insurers is 697 (on a 1,000-point scale). Among customers who have the highest levels of trust in their insurance providers, overall satisfaction jumps 180 points to 877.

The study found a 77-point gap separates the insurer with the highest overall trust score from the insurer with the lowest trust score. Insurers that achieve the highest levels of trust perform well on helping their customers understand policy coverage, understand their business needs and personalize products to their specific business needs.

Overall, 36% of small businesses experienced a premium increase this year, up from 34% in 2023. Of those, 51% of increases were initiated by the insurer, 16% were the result of changing business needs and 13% were due to a change the customer made to their policy.

However, the study noted that when customers completely understand the reasons for a premium increase, trust is 142 points higher than when they do not understand. Notifying customers in advance, particularly via phone and/or in person, and proactively discussing ways to reduce the increase will help customers understand the reasons and build trust, J.D. Powers noted in the study.

Lastly, don’t forget to get personal. Personalization is a key driver of commercial insurance customer satisfaction, but nearly half of customers are not receiving it, the results show. Overall, 55% of commercial customers say they’ve received insurance information personalized to their business, which in turn drives an average overall trust score of 761. Overall trust is 106 points lower (655) among the 45% of firms for which information is not personalized.