When I started covering the independent agency beat forNU back in 1981, there was a lot of talk about agentsgoing the way of the milkman or the buggy-whip maker. I didn'tbelieve that back then—and I still don't anticipate seeing agentsdisappear anytime soon.

But that isn't to say agents don't have to work a lot harderthese days to secure their role in the distribution chain, in termsof convincing both their carriers and customers about the addedvalue they bring to the table.

There are already many consumers buying personal lines directfrom carriers via the Internet. And while few business ownerspurchase their commercial coverage today without having anindependent agent or broker serve as an intermediary, that couldchange in the not-so-distant future, as a number of insurers are atleast starting to consider that option, while some have alreadytaken the plunge.

Indeed, as noted in my last blog, participants in a pair of small-business consumerfocus groups run on behalf of Deloitte's Center for FinancialServices earlier this year indicated that under the rightcircumstances and given the potential for a significant premiumdiscount, they might be willing to buy commercial coverage withoutan independent agent or broker by their side.

I heard firsthand testimony about these challenges last monthwhile moderating a pair of panels discussing agency-companyrelations, during the annual Insurance Leadership Forum co-hostedby the New York Insurance Association and the ProfessionalInsurance Agents of New York. One panel featured a group of carrierexecutives, followed by a panel of independent agents, eachdiscussing their take on how an agent could stand out with aninsurer as a business partner, and vice versa.

I have to admit I had a sense of déjà vu while the panelistsoffered their views, as well as when I listened to the laments,hopes and frustrations of attendees from both sides of the fenceduring breaks and meals. I've been hearing talk for three decadesnow about how to repair, restore and strengthen the oftenprecarious “partnership” between insurers and their independentagents.

While there are some new realities to deal with—mostly involvingtechnology issues—the way to improve agency-company relations isn'trocket science. A few years ago, when I was still the Editor inChief at NU, a producer survey co-sponsored with Deloitte laid out whatneeds to be done. And from what I heard at this conference, not alot has changed in terms of what each side expects from theother.

Agents want carriers that will be committed to markets and notsuddenly abandon them when times get tough. They want to be giventhe benefit of the doubt if an unusually large loss from anotherwise good account skews their loss ratio for the year.

They want a competitively priced product and a fair shake fortheir clients when a claim is filed, because they know they are theones who will look bad if a carrier gives the runaround to apolicyholder with a legitimate claim.

They also want a two-way partnership—a chance to have some inputon a company's strategy in a particular line or region. They seek agenuine dialogue when a carrier representative visits, and not justto be handed what one agent during a break between panelscharacterized as “my marching orders, take it or leave it.”

They appreciate the benefits new technologies have brought toinsurance in underwriting, claims, marketing and communications.But they also want insurance to remain a people business, in whichthe red flags raised or decisions rendered by automated systems canbe explained to clients in a reasonable manner, withflesh-and-blood individuals available and empowered to grantappeals in special cases.

As for insurers, they expect to see acommitment from their agents as well—not just in delivering asufficient volume of business but in placing a profitable book withthem. Moving business around annually for a small price savingsdoes not spell “partnership” for most carriers.

Many insurers, particularly on the commercial side, also expecttheir partners to go beyond mere policy-peddling and to beconsultative advisors for clients when it comes to risk managementand loss control. This lowers frequency, keeps severity undercontrol and enables producers to deliver a higher-quality book ofbusiness to their carriers while offering additional value to theclient.

Carriers expect ongoing organic growth from their agencies. Attimes, they see an agency with a large book of business essentiallyliving off renewals and not being particularly aggressive aboutexpansion. That puts the carrier in a tough spot—not wanting toalienate a solid producer but also seeking agencies that will bringmore new business on board each year to grow the overall pie.

For any partnership to succeed, an agency perpetuation plan isnecessary to reassure carriers that should a key principal leavefor any reason—retirement, illness or even death—a smoothtransition will take place so their valuable book of business is ingood hands.

In a related concern, carriers worry about the aging of theindependent agency force in general and look to partner with thosethat are proactively working to bring new blood into the sales andservice end of the business.

Last but not least, many insurers expect their partner agenciesto be on the cutting edge with technology—especially on socialmedia. The goal should be for an agency (as well as an insurer, forthat matter) to become part of the client's everyday life beyondthe obvious touch points of renewals and claims, which could spurcross-selling and improve retention rates. Some carriers arewilling to provide training to help get their distribution partnersup to speed in this area and even offer packages of material todistribute to clients via various social-media channels, so agentsdon't have to reinvent the wheel.

Unfortunately, carriers and agents don't always walk the walk,even if they talk the talk, on doing what it takes to improverelations. I heard complaints at the conference about carriers thaturge agents, in effect, to “do as I say, not as I do” when it comesto forming and maintaining a partnership. And to be fair, carriersoften echo the same complaints about the unreliability of agencyloyalty.

In the end, independent agency carriers and their producers canonly make a formidable team and stave off irrelevance anddisintermediation if they work together to retain the loyalty ofthose who keep them both in business—their clients.