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GREENWICH, Conn.Middle-market and small companies that switched insurers over the past two years achieved larger reductions in property/casualty and employee benefits premiums than most of them expected, a survey suggests.
Greenwich Associates, a financial services consulting firm in Greenwich, Conn., surveyed 632 companies--257 middle-market firms with $10 million to $500 million in sales and 375 small companies with $1 million to $10 million in sales--about their insurance buying decisions.
The companies were asked what level of premium savings would cause them to switch insurers; the 28% of middle-market companies and 30% of small companies that actually changed insurers were asked what level of savings they achieved. All but six of the midmarket companies that changed insurers, about 92% of those that switched, did so at a savings. The same was true for about 95% of the small companies.
For most coverages, the actual savings reported by those who switched insurers at a reduction exceeded the levels at which companies said they would consider switching, Greenwich Associates found in the survey, "Insurance Market Pulse: Looking at the Small Business and Middle Market Segments."
For example, middle-market executives said they would need a median savings of $12,500 on property/casualty placements to consider switching insurers, the consulting firm found. Among the middle-market companies that reported changing insurers for a premium reduction over the past two years, the actual median savings was $25,000, and 35% of the companies that switched saved more than $50,000, the survey found.
Middle-market respondents likewise said they would consider changing employee benefit and workers compensation insurers for a median savings of $12,500; those that actually changed insurers reported a median savings of $15,000, according to Greenwich Associates.
The survey does not cover the reasons companies may have had for switching insurers, though price is the likeliest reason, said Bill Bruno, a Greenwich Associates senior vp. It also does not explain what factors contributed to the premium reductions of the companies that achieved them.
The gap between the desired level of premium savings and the actual savings achieved by the surveyed companies, though, suggests that more insurance buyers should consider switching insurers for most property/casualty and employee benefit coverages, the survey concludes.
For more information on the study, contact Greenwich Associates at email@example.com.