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Personal Lines Insurers Best-Equipped to Handle Small Biz: J.D. Power

Small business owners find personal lines insurers are best at meeting their needs than commercial-specific carriers.

The amount of small businesses boomed toward the tail end of the recession, and as those businesses mature, their owners find their insurance needs are often better met by personal lines carriers dabbling in the coverage than by commercial carriers. That's according to the latest U.S. Small Business Commercial Insurance Study from J.D. Power & Associates.

The poll of more than 3,500 small business owners found that companies that write the majority of their business in personal lines of insurance have an average overall satisfaction score of 804 on J.D. Power's 1,000-point scale, compared to 766 for insurers that focus more broadly on writing commercial insurance. Forty-one percent of customers of predominantly personal lines insurers first had their personal insurance with the insurer and added their commercial lines later, the study found.

[Commercial Insurers Turn Focus to Underwriting Automation]

"Insurers that predominantly write personal lines insurance benefit from the personal relationships they are better able to build with their small-business customers," wrote Jeremy Bowler, senior director of the insurance practice at J.D. Power, in a statement. "The relationship is typically established early because small-business owners often purchase commercial insurance from the same agent that provides their home and auto insurance. Additionally, the agent is often local, so they have more personal contact with their customers and better understand their business."

Insurers were ranked on five factors: interaction, policy offerings, price, billing and payment, and claims. Erie Insurance, the highest-ranking insurer evaluated with a score of 813, leads in policy offerings and billings and payment. Nationwide and State Farm, tied for second with 809, excelled in interaction and price (Nationwide) and policy offerings and billing and payment (State Farm).

[ Auto Insurance Satisfaction at Record High: J.D. Power ]

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio

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Kelly22
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Kelly22,
User Rank: Author
8/29/2014 | 5:10:26 PM
re: Personal Lines Insurers Best-Equipped to Handle Small Biz: J.D. Power
Interesting study here. I've heard before that customers generally have higher satisfaction rates when working with local agents. Just goes to show how important it is to establish a personal relationship with clients.
KBurger
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KBurger,
User Rank: Author
8/11/2014 | 6:59:18 PM
re: Personal Lines Insurers Best-Equipped to Handle Small Biz: J.D. Power
This reflects a trend (or at least some thinking) in banking, where there is interest into how best to capture the small business customers. Do you treat them basically like consumers and try to "scale up" consumer/retail technology, or do you consider them "mini-corporates" and try to scale down the treasury management and other wholesale banking systems? The answer probably is somewhere in the middle.
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