Ease of doing business with carriers is critical to the productivity—and profitability—of independent insurance agents, says an industry survey. In a recently completed second annual survey, agents reported that “overall ease of doing business is a critically important factor in choosing a carrier with which to place business”, rating that item 3.824 on a four-point scale.
In the survey, conducted by Deep Customer Connections Inc. (DCC), based in Scituate, Mass., the most significant—and surprising—finding is a very large increase in the gap between agents’ expectations and carriers’ performance reported from last year’s survey.
“The gap between expectations and performance tripled on five of the 10 factors of ease of doing business,” noted Paul Croke, one of DCC’s founding partners.
One bit of good news for carriers is that as an industry, their performance improved fractionally on all 10 ease of doing business factors. According to Nort Salz, another of DCC’s founding partners, “Carriers’ performance improvements were encouraging. But they were dwarfed by a large increase in agents’ expectations, leading to overall significantly larger performance gaps.”
“Of course, the performance of individual carriers varies considerably,” added Croke.
The Web-based survey was sent to over 40,000 independent insurance agencies and brokerages nationwide. There were nearly 3,200 responses with more than 100 different carriers being rated.
Respondents provided demographic information and then reported on the importance of overall ease of doing business in choosing a carrier with which to place their business. Then they rated both the importance of 10 different ease of doing business factors as well as the performance of several carriers with whom they frequently do business. All ratings were on a four-point scale.
The 10 ease of doing business factors were identified by Deep Customer Connections, based on their work in the insurance industry and validated by independent insurance agents and carriers. The factors are:
1) Understanding and acting on the needs of agency personnel
2) Responsiveness in underwriting
3) Flexibility in underwriting
4) Timely and accurate policy services
5) Effective, user-friendly information technology
6) Handling claims promptly
7) Handling claims fairly
8) Providing marketing support
9) Providing insurance industry technical support
10) Making it easy for the agency to do business with its customer, the insured
“It’s significant that our survey measures technical and work flow as well as relationship dimensions,” said Salz, “because neither by itself will create the best business results.”
Was this article valuable?
Here are more articles you may enjoy.