A new study by Nationwide reveals gaps in perception between small business owners and their insurance agents. In it, businesses are seeking more insurance advice as they continue to experience aftershocks of COVID-19 and an unpredictable business climate.
Despite valuing local agent’s expertise for their protection needs businesses feel gaps exist when it comes to the perception of service needs. Particularly more and more businesses are looking for support in understanding their policies and ensuring they have the right coverage for their particular needs. six in ten small business owners want to better understand their policies and find the best price as consumers.
Nationwide Survey: Small Businesses Want to See Their Agents
Among issues needing clarification is guidance on employee benefits where 57% of midsized business say keeps them awake at night. This also includes the availability of safety and loss control resources which 35% of small businesses need clarifications on. Over a quarter of all surveyed (26%) also seek retirement and banking advice as well.
Conversely, more than half of independent agents (57%) say that businesses are too concerned about their business surviving the pandemic.
“The best agents will ensure clients continue to feel their presence, even virtually, by identifying new ways to strengthen relationships, solve problems and offer peace of mind to clients whose expectations for expertise are on the rise,” said Cathy Allocco, vice president of Small Commercial Sales and Distribution at Nationwide
Where the Disconnects Arise
Businesses and insurance agents seem to be out of sync in a number of areas. Among the asks by businesses include guidance on business interruption or disaster planning (39%). While others (18%) want information on cyber security and retirement.
Businesses also wrestle with understanding different types of coverage. As well as the time it takes to settle a claim, insurance terminology and understanding how much coverage they need.
Of these 46% of small businesses say they find it a challenge understanding what is and what is not covered in their policies. A further 44% of small businesses say they find it challenging to find the best price for their policies. Points recognized by 55% of insurers who admit to struggling to educate their clients on the type of coverage they need.
For almost all their insurers (95%) claim that they are always there when customers need them. To which a quarter (25%) of small businesses disagree with their agents. In terms of offering the best price for policies 91% of agents say they provide the best price. A point where 31% of businesses disagree with.
Insurance agents (94%) also say they regularly call to make sure policies are the right fit for their clients. But 36% of small businesses feel they have been given the cold shoulder. Access wise, businesses are looking for local insurers. Despite the popularity of digital platforms, a majority of small businesses (68%) prefer to have insurance agents that are physically located. Only 32% of small businesses prefer to handle all insurance needs digitally.
Where Agents Find Challenges
Despite the misalignment, agents also admit to shortfalls on their part as well. The major challenge cited by the insurance agents is in regards to adopting new industry tech. Another challenge also includes understanding the nuances between different industries (53%). In terms of the current scenarios 51% state that they face challenges helping their clients in regards to disaster preparation and mitigation practices.
The study puts to light four recurring themes regarding the disconnect. These are gaps in terms of perception, support availability, coverage education and guidance. The economic uncertainty and unpredictable markets are responsible for prompting the need to reevaluate insurance needs.
Only 55% of agents think their clients feel uncomfortable talking about economic uncertainty. While more than half of business owners feel their agent is ready with the knowledge and resources to have these discussions. Agents also admit that both their commercial line and personal line customers are unsure how the current economy will impact their business and insurance needs.
A clear takeaway is that businesses prioritize carrier financial strength, stability and name recognition when they shop for insurance. In fact, 91% of small businesses place importance on using a company that has strength and stability. While 82% value working with a well-established and well-known carrier.