Driving Growth by Optimizing the Property Casualty Agent Experience

by Karlyn Carnahan, July 20, 2015
Industry Trends
North America

Abstract

Most carriers in North America work with independent agents. Although the majority of premium for personal lines is written direct, that is largely concentrated in a few large carriers. Carriers who use independent agents know that high production from agents is correlated with strong relationships. However, beyond encouraging a strong personal relationship with an underwriter, what else can a carrier do to systematically build a stronger connection with an agent and grow their book? Celent surveyed a group of agents to understand those areas most likely to make a carrier the agents’ top choice.

Key findings in the report include:

  • It is easy to think that price is the most important factor when it comes to where an agency chooses to place business. While competitive products and price certainly are important, the responsiveness of the underwriter is paramount. A fast underwriting decision is also a significant factor, with over 60% of agents stating this is a must-have. 
  • Money matters to agents, although the specific components are not essential to all agents. The most important component is commissions. Interestingly enough, 40% stated that the commission rate does not necessarily have to be competitive. Only 30% said incentive compensation programs were must-haves, and 40% said they were “nice to have” or didn’t matter at all.
  • Beyond that, agents also look for support in other areas. A strong brand is important, because it is easier to sell a company where the prospect already has an emotional connection. Marketing, training, and consulting support are seen as important by more than half the agents, especially younger agents who may benefit more from these types of services. 
  • Mobile tools and social media support are generally not seen as important items to most agents, but there is a significant generational difference here. Twenty-five percent of younger agents see mobile as a must-have compared to 4% of those over 60. Generational differences will become more important to carriers as Baby Boomer agents increase their rate of retirement and are replaced by GenX and Millennial agents. 
  • Agents want carriers to invest in those tools that are most important in helping them perform their job of writing business and providing customer service to the policyholder. Most important to agents is continuing to build out both the integration with the agency management system and expanding the functionality of the portal. Least important to agents are features such as mobile apps, online certificates of insurance, online commission statements, and access to marketing materials.

“Looking ahead, the industry is likely to continue to experience increasing channel complexity and increasing regulation, which means there are opportunities both to improve the agent experience and to reduce costs along the way,” says Karlyn Carnahan, a research director with Celent’s Insurance practice and author of the report. “Carriers who are looking to drive growth by improving the agent experience should start by looking at their technology offerings and making sure they are delivering the functionality that is most important to their agents.” 

This report presents the results of an online survey conducted during May 2015 of independent insurance agents.

This report contains 13 figures and one table.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

 

Key Findings

1

Introduction

3

 

Key Research Questions

3

 

About the Report

3

Important Factors in Carrier Choice

6

 

Core Capabilities

6

 

Credentialing Capabilities

8

 

Importance of Compensation Components

9

 

Importance of Agency Support

10

Top Carrier Performance

12

 

Top Carriers

12

 

Top Carrier Performance

13

 

Where Are Top Carriers Still Vulnerable?

14

Where Carriers Should Invest

16

 

Agency Management Systems Vs. Agent Portal

16

 

Social Media

17

 

Agents’ Investment Recommendation

18

 

Investment Strategies

19

Next Steps for Carriers

21

Leveraging Celent’s Expertise

22

 

Support for Financial Institutions

22

 

Support for Vendors

22

Related Celent Research

23

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