Seeking

Satisfaction
J.D. Power’s recent study of risk professionals and risk management
team members in the United States and Canada shows that insurers
and brokers need to work together to meet commercial customer needs.
Care must be taken with regard to lim iting customer-reported issues,
understanding the customer’s business and communicating effectively.

Timothy Traditionally, com m ercial insurers have relied W ith no benchm ark or industry-w ide baseline
Bebout u p o n insurance brokers to m anage custom er re ­ for custom er satisfaction, the first-ever such study
Director of' lationships. Risk m anagers n o w are looking for seeks to provide an independent and objective
Commercial b o th parties — their insurers an d th eir brokers m easure o f overall satisfaction am ong large busi­
Insurance Practice,
— to w ork together to m eet th eir needs. ness insurance risk professionals in the U.S. and
J.D. Power
J.D. Pow er’s 2014 Large Business Commercial Insur­ Canada.
ance Study, released in early February, exam ines The study is based on responses from alm ost
the perform ance o f large business com m ercial 1,000 risk professionals o r em ployees o f o rgani­
insurers and brokers, and highlights best prac­ zations w h o provide oversight or are m em bers o f
tices that are critical to satisfying large business their organization’s risk m anagem ent team.
insurance custom ers. Organizations included in the study have at least
Brokers — w h o are indepen d en t and typically U S$100 m illio n in annual revenue o r operating
represent m ultiple insurance providers — often budget, and have purchased com m ercial property,
are the m ost frequent po in t o f contact for cus­ w orkers’ com pensation o r auto insurance from
tom ers for service-related interactions. Yet the o ne o f the insurers o r brokers included in the
study finds that custom er satisfaction is notably study. M ore than one-third o f custom ers surveyed
higher w h en insurers are involved d u rin g ser­ have m o re than 10,000 em ployees, m o re than
vice interactions, com pared w ith service interac­ three-fourths o f the businesses have m ore than
tions that are exclusively w ith the broker (86S 10 physical locations, and 81% realize annual
versus 769, respectively, on a 1 ,0 0 0 -p o in t scale revenue am ounts o f US$500 m illion o r m ore.
am ong p roperty custom ers).
The large com m ercial insurance m arket is a MEASURING SATISFACTION
large but u n iq u e niche for w h ich there is very The study m easures custom er satisfaction w ith
lim ited inform ation available o n ho w customers commercial property, workers’ compensation and
rate their satisfaction w ith brokers and insurers. auto insurers based on five factors: interaction;

3 0 Canadian Underwriter March 2015

program offerings; price; billing and o n satisfaction w h en a KPI is n o t m et insurance program s and making sure
paym ent; and claims. Satisfaction w ith show s a significant drop in custom er insurers and brokers “com pletely” u n ­
brokers is m easured based o n four fac­ satisfaction. The 11 KPIs centre o n three derstand a custom er’s specific business
tors: ease o f contacting broker; reason­ core servicing principles: needs are two KPIs that significantly
ableness o f fees; advice and guidance in • Limiting issues: Limiting custom er-report­ impact the customer experience. Making
selecting p rogram offerings; and tim eli­ ed issues — either as a result o f errors sure the broker “com pletely” u n d er­
ness o f resolving contact. that occur during billing or problem s stands the business’ needs is a leading
during the renew al process — is an KPI that brokers can deliver to p ro ­
In te ra c tio n im portan t perform ance indicator that vide a satisfying experience am ong
O f the factors m easured in the study, underscores h o w essential it is that broker-served custom ers. M ore than
interaction is consistently a large driver insurers provide accurate inform ation four o ut o f five (84% ) brokers m eet
o f overall custom er satisfaction. It is the and ensure the renewal process is free this KPI. However, there is a signifi­
second m ost im pactful factor across from errors. cant 22 8 -in d ex p o in t decline in satis­
p ro d u ct lines, contributing to nearly • Understanding a customers business: Two KPIs faction am ong custom ers w h o rep o rt
o n e-fo u rth o f the overall index m odel em phasize the im portance that cus­ that their broker partially o r does n ot
in each line. W ithin each product line, tom ers place on insurers’ and brokers’ u nderstand the business’ needs co m ­
p ro g ram offering is the leading driver understanding o f their businesses and pared w ith custom ers w h o say their
o f satisfaction am ong property insurance adding value by becom ing partners in broker understands their needs (890
custom ers, w hile price is the leading their organizations. Ensuring flexibil­ versus 662, respectively).
driver am ong auto insurance customers. ity w hen designing and im plem enting • Communicating effectively: It is vital that

Key p e rfo rm a n c e in d ic a to rs
T h e B u s in e s s B e n e fits o f C u s to m e r S a tis fa c tio n _ Deiighted/pieaseo
In addition to quantifying the factors
Financial return by customer satisfaction tier - insurers Indifferent/Displeased
that m ost influence overall satisfaction,
the study provides valuable insights re ­ Property Workers' Compensation Auto

garding the service practices — or key

perform ance indicators (KPIs) — that
have the m ost influence o n custom er
ttf H 80%
16%
74%
H I
67%
■ Will recommended

satisfaction. This analysis o f KPIs focuses

on service practices that insurers and
V V
brokers can incorporate into their busi­ 53% Jhr 54% 26%
Will not switch ^B Will not switch 14% ^ H WM| not switch
ness m odels in order to increase cus­ ^B for any price

to m er satisfaction.
Ultimately, these insights can foster
\ J "
greater collaboration and discussions 10% 4g% 15% 5 7 %
62%
am ong custom ers, insurers, and brokers, ^B Will renew V Will renew ^B Will renew
and lead to stronger, m utually beneficial
business relationships. V
KPIs establish the relationship betw een
Source: J.D. Power
the subjective im pressions o f the end-
custom er (such as courtesy, know ledge
and ease o f contacting) that determ ine O v e ra ll P ro p e rty C S I a n d F a c to r S c o re s : T e le c o m a n d U tilit ie s
the index scores and objective m etrics
(such as tim e, frequency and cost) that
are behaviour-based and actionable for
insurers and brokers to integrate into their
perform ance im provem ent initiatives.
The study identifies 11 KPIs that have
the greatest im pact on satisfaction, and,
hence, are critical to a satisfying experi­
ence for large business com m ercial in ­
surance customers. Customers w ho say
their insurer or broker delivered on each
KPI w ere m ore satisfied; the im pact Source: J.D. Power

:52 Canadian Underwriter March 2015

 information be shared with custom­ significant 15 9 points when customers below 800) say they “definitely will” re­
ers, especially regarding changes to experience issues during the renewal new and 26% say they “definitely will”
policy coverage or pricing. Providing process. recommend their insurer (see upper
in-person interactions and making In contrast, only 56% of customers graphic on page 32).
sure insurers are involved in service indicate their insurer is “completely”
and claims processes are important flexible when designing and implement- HIGHEST OVERALL CSI AND FACTOR
KPIs that allow insurers and brokers ing programs — another impactful SCORES: TELECOM AND UTILITIES
to communicate with customers. property-related KPI — and satisfaction • Overall property insurance satisfac­
among these customers is 877. tion is highest among customers in the
INSURER-SPECIFIC DELIGHTS However, satisfaction declines by a telecom and utilities industry (890, see
— PROPERTY significant 138 points when custom­ lower chart on page 32) and is lowest
The study identifies five KPIs among ers perceive that their insurers are not among customers in the accommoda­
property insurance customers that are completely flexible when designing and tions, food services, arts, entertainment,
critical to providing them with a satisfy­ implementing programs. retail and recreation industries (778).
ing experience. These KPIs focus on lim­ There is a strong relationship between • Price and coverage options are among
iting errors and problems, as well as mak­ satisfaction levels and loyalty and advo­ the main reasons for choosing a prop­
ing sure an insurer is involved in service cacy. Among property insurance custom­ erty insurer across all industries.
interactions and claims management. ers who are “pleased/delighted” (over­ • 77% of telecom and utilities custom­
Limiting customer-reported problems all satisfaction scores of 800 or higher), ers indicate their insurers met flex­
during a renewal is the most impactful 62% say they “definitely will” renew with ibility demands when designing and
property-related KPI. their current insurer and 80% say they implementing insurance programs
Insurers are delivering on this KPI at a “definitely will” recommend their in­ — the highest percentage in the
high rate — 93% of customers say they surer to family and friends. study — compared with only 48% in
did not experience issues during the In contrast, only 22% of customers the transportation, warehousing and
renewals. But satisfaction erodes by a who are “indifferent/displeased” (scores waste management industries. =

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