As goes experience, so goes perception
It was Benjamin Franklin who said “it takes many good deeds to build a good reputation and only one bad one to lose it.” It seems to hold true for the insurance industry in its relationship with policyholders as well. A new study reveals that more than one-third of small business owners have had a bad claims experience with their carrier and that it’s often soured them on the entire insurance company as a result.
The 2019 Small Business Risk Report conducted by Forbes Insights for the Hanover Insurance Group, surveyed small business owners across the country who had a claim in the last five years to evaluate their experience. The report found 36% of respondents were unhappy with how their insurance claims were handled by their carriers. These claims experiences impacted overall satisfaction, resulting in less confidence by these policyholders in their insurance program as well as their views on how future claims would likely be handled. By contrast, 94% of small business owners who experienced a claim and were highly satisfied with the result, expressed overwhelming confidence in their overall insurance program. The lesson: perception matters.
Other key highlights from the study include:
- Cyber continues to be a growing concern for small business owners. While only 18% of small business owners reported facing a data breach incident in the past five years, 67% report they are becoming more vulnerable to cyber and data breach claims as they digitize their businesses.
- 52% of respondents believe it is likely that their businesses will have a claim in the next five years, with property damage, employee injuries and auto accidents rounding out the top three claims concerns. The type of business insurance claims a small business owner anticipates for the future directly mirrors their prior claims experience.
- The top three factors driving claims satisfaction: fair payment of a claim, quick response and processing time, and knowledgeable claims professionals.
While small business owners acknowledge the value of risk management services, about one-third of small businesses who work with independent agents reported they were not offered risk management services or were not aware of them.
LMA Newsletter of 5-6-19
