Concerned about their businesses, middle market customers are reassessing their insurance needs; but struggle understanding their coverage

Agent Authority: Middle Market Business Owners seek personalized counsel they can rely on

Nearly 8 in 10 middle market business owners are concerned about making it through the economic downturn, and they’re reassessing their businesses’ insurance needs as a result, according to new Agent Authority research from Nationwide*. Although owners are confident in their insurance agent’s ability to serve their protection needs, the results reveal many middle market business owners struggle to understand their current coverage, presenting opportunities for agents to provide personalized attention and advice for clients.

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Nationwide’s research uncovered four key themes for middle market business owners and commercial agents:

1. Business owners are confident in their agents and trust their advice.
2. Agents must offer a highly digital experience while delivering personalized guidance.
3. Business owners want to better understand what’s in their policies.
4. Concern is high for middle market business owners, and they’re taking protective measures.

“As business owners adapt to remain competitive, they need an agent they can trust to see around the corner and customize their protection needs,” said Linda Stueber, vice president of Nationwide’s Middle Market commercial team. “Now more than ever, it’s vital for agents to help business owners fully understand the coverage they have in place, adapt to new or changing risks, and be proactive in addressing those risks or gaps.”

Mutual Confidence
As compared to small business owners, middle market business owners have more complex insurance needs and in turn need an agent they can confidently rely on. Fortunately, most middle market business owners note that their agent is always available when they need them, able to offer the best price and regularly checks in on their needs. They also look to build a relationship with their agent over time and value an agent who can handle all of their insurance needs, not just property and casualty. Commercial agents echoed confidence in their abilities and services for clients.

• 95% of agents and 84% of middle market business owners agreed that insurance agents are always there when needed.
• 91% of agents said they can offer the best prices and 86% of middle market business owners agreed.
• 94% of agents responded that they’re regularly checking in with clients to make sure their policy fits their needs; 83% of middle market business owners agreed and nearly half (49%) have checked in with their agent due to Coronavirus.
• 93% of agents and 89% of middle market business owners agree insurance agents have a vast knowledge of different types of industries and protection solutions.

Quick tips for agents:

• Look for new opportunities to initiate touch points with clients.
• As business owners seek education about their risk management, consider pointing them to My Loss Control Services which offers digital safety resources, virtual consultations and more for business owners looking for quick technical advice.
• Help clients understand the importance of finding the right price, not the lowest.

What Middle Market Business Owners Want
The Agent Authority research shows these business owners look for insurance agents who are trustworthy, bear a strong reputation and who know and understand their unique needs. They also prefer strong, stable and well-established carriers to protect against their complex risks.

• 92% of middle market business owners place importance on using a company that has strength and stability, and 86% value working with a well-established and well-known carrier.
• While 81% feel it’s important to work with an insurance agent with a local office close by, they also value digital experiences; 51% said they prefer to handle their insurance needs digitally, highlighting a need to offer both digital and personal interactions.
• 89% want an agent who can handle all of their insurance needs.
• 90% value working with an insurance agent who personalizes coverage to fit their needs.
• Middle market business owners are also looking to their agents for more guidance on topics outside of traditional insurance.
  • 57% of middle market business owners are seeking information on employee benefits.
  • 46% are interested in guidance on business interruption or disaster planning.
  • 45% want safety and loss control resources.
  • 37% are interested in retirement, succession planning and cybersecurity.

Quick tips for agents:

• Work with carriers who help you reach customers with digital capabilities and deliver a breadth of expertise and solutions to meet their needs.
• Stay up-to-date on industry needs, trends and emerging risks to be agile for clients and demonstrate you’re prepared for anything.
  • The Commercial Insight Center offers quick, specialized and actionable information to assist agents as they protect clients.

Challenges:
Middle market business owners have a lot to consider when shopping for insurance, and in turn, typically face significantly more challenges in the process than small business owners. Their top struggles include understanding the extent of their coverage, differentiating between types of coverages and finding the best price for their needs. Commercial agents shared obstacles too, such as understanding nuances between different industries and helping clients with disaster preparation.

• 71% of middle market business owners are challenged with understanding what is and what is not covered in their policy.
• 69% struggle with finding the best price for their protection needs.
• 69% have difficulties understanding different types of coverage and the length of time it takes to settle a claim.
• More than half of agents struggle with understanding the nuances between different industries (53%), educating clients about different types of coverage (52%) and helping clients with disaster preparation or mitigation (51%).

Quick tip for agents:

• Work with clients to walk through scenarios to help them understand how proactive planning and loss control can help fill potential gaps and keep them running smoothly if the unexpected should occur.

Economic Outlook:

Compared to small business owners, middle market business owners are much more concerned about their businesses surviving today’s economic turbulence. Despite that, many are still uncomfortable talking about economic challenges with their insurance agent even though they largely feel their agent is prepared for the conversations.

• Nearly 7 in 10 middle market business owners (69%) responded that they’re too concerned about the future of their business to be concerned with their insurance right now.
• However, about half (49%) have checked in with their insurance agent to discuss their coverage due to the Coronavirus, and 77% have reassessed or will be reassessing their insurance needs.
• 78% of middle market business owners are unsure how the economy will impact their insurance coverage needs compared to 55% with small business owners.
• 63% of middle market business owners think talking about economic uncertainty with their agent is uncomfortable, but 84% believe their agent is prepared to have the conversations.

Quick tips for agents:

• Many middle market business owners aren’t thinking about insurance right now, but agents should be thinking about it for them.
• Consider new and different risks your clients may be facing, like cyberattacks as employees work remotely, or innovative technologies like telematics to help them operate more efficiently and safely.
• Don’t be afraid to have difficult conversations about the economy with your clients. Most middle market business owners are uncertain how the economy will impact their insurance needs, but it’s a topic they should be thinking about.

*These insights and more were uncovered through Nationwide’s ongoing Agent Authority research series, which includes samples of independent insurance agents, various business owners, and consumers. Previous Agent Authority research reports: Agent-customer relationship; Small business owner needs and challenges; 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. For the purposes of this survey, middle market business owner was defined as anyone who self-reported as being a sole or part owner of a company with either 51-500 employees or $10M-$500M in revenue or 20+ fleet vehicles. As a member of CASRO in good standing, Edelman Intelligence conducts all research in accordance with Market Research Standards and Guidelines.

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