Strengths and Weaknesses, Part 2: What Agents Think of Regional, National P/C Insurers

Regional carriers come out on top in agency compensation and claims services, while nationals outscore regionals on loss control and technology. That’s according to an Insurance Journal weeklong survey in June on regional and national insurance companies.

More than 400 agents and brokers offered perspectives on how regional and national insurers rank on everything from products and pay to technology and field representatives. Part one of this report — published in IJ’s June 16 magazine issue and on IJ.com — revealed the results on customer service, agency relations, underwriting and insurance products. Part two — published in IJ’s July 7 magazine issue — discusses the survey’s results on claims, technology, compensation, marketing and advertising strengths and weaknesses.

Claims
Regional carriers perform well on claims services provided to agency insureds when compared to their national competitors, but large nationals beat out regional insurers on loss control services offered to insureds. More than half of all respondents rank claims services from regional carriers as very good (38 percent) or excellent (21 percent),
with an average rating of 3.66. National carriers’ claims services are rated good (37 percent) or very good (31 percent), with an average rating of 3.27.

The survey calculates average ratings based on a scale of one to five, where one equals a “poor” rating and five equals an “excellent” rating.

Loss control services score high among national carriers, according to agents. Some 39 percent say national carriers’ loss control services rate good, while another 33 percent rate them as very good, with an average rating of 3.24. Regional carriers’ loss control services scored mostly good (42 percent) or average (22 percent), with an average rating of 3.06.

Compensation
In terms of agency compensation, including commissions and profit sharing, regional carriers came out on top. “National insurers believe they make money by managing their dollars,” said one survey respondent. “Regional insurers make money by managing their agency force and the relationships that go with them.”

Some 36 percent rate personal lines commissions given by regional carriers as very good, while another 34 percent rate them as good. The average rating for regional carriers’ personal line commissions came in at 3.30. The majority rate national carriers’ personal lines commissions as good (46 percent) or average (26 percent), with an average rating of just 2.90.

Commercial lines commissions fare only slightly better for national carriers. Some 43 percent rate them as good, while 27 percent rate them as average, with an average rating of just 2.96. Regional carriers’ commercial lines commissions score highest among agents with an average rating of 3.32. Some 35 percent rate the commissions as good, while another 34 percent rate commercial lines commissions as very good.

Regionals also rank higher in agents’ perceptions about profit sharing. The average rating for regional carriers’ profit sharing held at 3.39, with 32 percent as very good, or good (24 percent).

Technology
National carriers seem to do a better job when it comes to the technology needs of both the agency and the customer, according to the survey. Even so, one respondent said: “Both regional and national (carriers) need to expedite their technology.”

Another respondent said in general, “carriers are still not doing enough to push for an agency-friendly, SEMCI environment.”

Nearly three-quarters of respondents rate national carriers’ use of technology for agencies as very good (43 percent) or good (29 percent), with an average rating of 3.55. But regional carriers’ use of agency technology doesn’t fall far behind that of their national competitors.

Regional carriers score good (38 percent) or very good (33 percent) with an average rating of 3.17.

There appears to be a greater difference when it comes to technology for agency customers, according to the results. Agents score national carriers’ use of technology for customers as very good (39 percent) or good (28 percent) with an average rating of 3.42.

Regional carriers’ lag behind in customer technology with ratings of just good (36 percent) or average (28 percent) with an average rating of only 2.88.

Marketing
When it comes to the value of carrier field representatives, regional carriers score somewhat better than national carriers. However, national carriers rank better on marketing and advertising as well as on financial stability and ratings.

Agents say field representatives’ value for regional carriers is very good (30 percent) or good (30 percent) with an average rating of 3.23. National carrier field reps rank as average (34 percent) or good (30 percent) with an average rating of just 2.68.

Agents feel financial stability and ratings of national carriers versus regionals are similar.

Nationals scored very good (48 percent), while regionals also scored very good (41 percent). The average rating for nationals came in at 4.00, while the average for regionals came in at 3.73.

National carriers came in better than regional carriers in terms of marketing and advertising value, according to agents. Nationals are rated as good (37 percent) or very good (29 percent), with an average rating of 3.05. Regionals rank good (38 percent) or average (28 percent) with an average rating of just 2.68.

One agent noted that he enjoys his relationships with regional carriers far more than those with his national carriers. “Being a small agent, the regional carriers seem to care more about my business,” he said.

Demographics
Agents and brokers from 44 states responded to IJ’s online survey in early June 2008. Of the 411 respondents, 55 percent reside in suburban areas, while 28 percent reside in urban, and 17 percent in rural areas. Most agencies responding to the survey had between one and five regional carriers (59 percent), and between one and five national carriers (58 percent).