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New Study Shows Small Business Owners Need Guidance More Urgently than Independent Agents May Recognize

Agent Authority: Small business owner survey reveals top challenges and needs when shopping for insurance and working with an agent

Columbus, OH  New Agent Authority* research from Nationwide* found that small business owners would benefit from more tailored and frequent insurance advice as they endure COVID-19’s continued impacts and unmatched economic decline. While they value a local agent’s expertise for their protection needs, many small business owners said they could use more support in understanding their policies and ensuring they have the right coverage for their needs.

According to the survey, more than half of independent agents (57%) said that their clients are too concerned about their business surviving the pandemic to talk to their agent about insurance needs. However, 6 in 10 small business owners disagreed; they want to hear from their agent.

Nationwide’s study uncovered four key themes for small business owners and commercial agents:

  1. Business owners would like more attention from their insurance agents.
  2. Business owners want personalized policies that fit their unique business needs.
  3. Business owners would appreciate assistance in better understanding what’s in their policies.
  4. Economic guidance is welcome.

“Small businesses and the independent agents who help protect them continue to face unprecedented and evolving business adversity,” said Cathy Allocco, vice president of Small Commercial Sales and Distribution at Nationwide. “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.”

Out of Sync

The Agent Authority research revealed small business owners feel there are opportunities for agents to better support their needs. Small business owners were less likely than middle market business owners to agree that their agent is always available when they need them, able to offer the best prices or regularly check in on their needs. While agents believe they’re meeting the needs of their small business clients, it appears business owners are looking for more support.

  • 95% of insurance agents reported they’re always there when customers need them, but 1 in 4 small business owners disagree (25%).
  • 91% of agents said they can offer the best prices, but 31% of small business owners disagree.
  • 94% of agents responded that they regularly check to make sure policies fit their clients’ needs, yet 36% of small business customers disagree.

Quick tip for agents:

  • As small businesses continue to navigate change, identify ways to regularly check in with your commercial customers to understand their needs, ensure they’re appropriately protected and assess whether you can add value through technical expertise or solutions like telematics.
  • Leverage digital marketing and social media to reach your customers where they are and elevate your thought leadership profile.

What Small Business Owners Want

While small business customers and agents agree it’s important for an insurance agent to be trustworthy and cost effective, the data shows a small business owner places more importance on having an agent who knows and understands their needs.

  • Nearly 7 in 10 small business owners prefer to work with an agent located physically near them highlighting the value a local agent brings; 32% prefer to handle all insurance needs digitally.
  • Business owners ranked “being able to talk live to a person when you have an important issue or question” as the fourth most important attribute when buying or renewing an insurance policy.

Resource-limited business owners are also seeking guidance on topics beyond traditional insurance, such as disaster planning, loss control, retirement and cybersecurity. Additionally, a carrier’s financial strength and stability is more important to business owners than agents may realize when buying or renewing a policy.

  • 39% of small business owners are seeking guidance on business interruption or disaster planning.
  • 35% of small business owners are interested in safety and loss control resources to mitigate risks.
  • 18% of small business customers want information on cybersecurity and retirement.
  • Customers prioritize carrier financial strength and stability and name recognition when shopping for insurance; 91% of small business owners place importance on using a company that has strength and stability, and 82% value working with a well-established and well-known carrier.

Quick tip for agents:

  • The Business Solutions Center offers insurance and business guidance and resources to help small business owners protect and grow their businesses.
  • Ask your carrier partners for resources to talk to your customers about disaster and business continuity planning, safety and loss control, and products that could present cross-selling opportunities like cybersecurity, employee benefits and retirement solutions.
  • Nationwide’s My Loss Control Services provides a variety of loss control resources and solutions.

Shared Challenges:

The research shows that small business owners are still struggling with understanding their insurance policy, and they appreciate an agent’s assurance that they have the right insurance coverage and protection for their needs. Similarly, many agents grapple with understanding nuances between different industries and educating clients about the level of coverage they need Similarly, many agents struggle educating customers on the coverage needs for their unique businesses.

  • 85% of small business owners agree insurance agents provide assurance that they have the right coverage and protection.
  • Understanding what is and what is not covered in their policy (46%), finding the best price for their protection needs (44%) and understanding the level of coverage needed (43%) are small business owners’ top insurance challenges.
  • 55% of agents say they struggle educating customers on the coverage they need and 46% of agents say providing the level of service customers demand is a challenge.

Many small business owners also wrestle with understanding different types of coverage, the time it takes to settle a claim and keeping up with new technology offered by the insurance industry.

Agents also reported challenges with adopting new industry technology, educating clients about different types of coverage, and helping clients with disaster preparation or mitigation.

Quick tips for agents:

  • Continue to elevate your expertise within the industries you serve and educate your customers on how COVID-19 may impact their business.
  • As you proactively reach out to customers, offer to discuss generally how their policy coverages apply and to help them understand potential gaps they may need to fill with business continuity planning, loss control and other measures.
  • Nationwide’s Agent Blog offers information on insurance market trends and resources for reaching more customers through digital and social media.

An Economic Outlook:

Six in 10 small business owners feel the economy will be the same or worse in the next 12 months and many are taking steps to reassess their insurance needs.

  • 55% of small business owners are unsure of how the economy will impact their insurance coverage needs
  • 53% of small business owners are concerned about their business making it through the economic downturn
  • However, 82% of small business owners are taking measures to protect their business’ assets
  • 54% have reassessed or will be reassessing their insurance needs because of the economic uncertainty
  • 33% have created a business plan to address the economic impact from the Coronavirus

Many small business owners are ready and willing to have these difficult conversations. However, 4 in 10 small business owners are not sure whether their agent is ready to discuss economic challenges.

  • 36% of small business owners felt having these economic uncertainty conversations with their agent is uncomfortable; 55% of commercial agents feel their clients are uncomfortable talking about the economic uncertainty.
  • 57% of small business clients thought their agent was prepared to discuss economic uncertainty compared to 75% of total business owners.

Quick tips for agents:

  • Ensure you have the training and resources to talk about the recession and economic conditions with your customers and offer potential solutions to help them.
  • Nationwide provides regular economic updates from the office of our Chief Economist to help agents have more informed conversations about the economy with customers.

*These and other important insights came out of the summer survey of the Agent Authority research series conducted by Nationwide, which includes samples of independent insurance agents, small business and mid-market business owners, and consumers. Nationwide also recently shared Agent Authority survey data on the agent-customer relationship and agents’ top concerns through the pandemic.

Survey Methodology:

Nationwide commissioned Edelman Intelligence to conduct a 20-minute quantitative online survey among a sample of 2,600 U.S. independent insurance agents, small business owners, mid-market business owners, mid-market business owners with fleet vehicles, African American business owners, Hispanic business owners and general consumers between June 9 – June 25 to understand what business owners and consumers value when buying or renewing insurance policies, explore the different challenges each audience faces around insurance, gauge perceptions of the economy and how each audience is managing uncertainty, and find out the actions business owners and consumer have taken as a result of COVID-19 and the conversations they’re having with agents. As a member of CASRO in good standing, Edelman Intelligence conducts all research in accordance with Market Research Standards and Guidelines.

About Nationwide

Nationwide, a Fortune 100 company based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the United States. Nationwide is rated A+ by both A.M. Best and Standard & Poor’s. An industry leader in driving customer-focused innovation, Nationwide provides a full range of insurance and financial services products including auto, business, homeowners, farm and life insurance; public and private sector retirement plans, annuities and mutual funds; excess & surplus, specialty and surety; pet, motorcycle and boat insurance. For more information, visit www.nationwide.com. Follow us on Facebook and Twitter.