A new study from the National Association of Professional Insurance Agents (PIA) has found that small-business owners (SBOs) strongly prefer independent insurance agents when it comes to making their insurance selections, but that those agents must take steps to continue to demonstrate their value as informed advisors and offer digital ease of use.

"Small Business Insurance & The Internet—The Voice of the Commercial Lines Customer," the latest project of PIA and The PIA Partnership, was conducted by PIA's agency-company council and designed to provide independent insurance agents with real intelligence on meeting the new challenges posed by online providers and direct writers.

Among the PIA's findings about what small-business owners want from independent agents:

In order to be competitive, independent agents must have a full, credible presence online.
Small business owners most value agents with professional, industry-specific knowledge.
Most small business owners who shop insurance online still lack confidence in their ability to make ideal insurance choices, and they want help.
Agents need to sell their value. Without more frequent demonstration of value, alternatives like bypassing the agent by going online will encroach further.

The research showed that even when the insurance process starts online, small-business owners still want to depend on an agent to check and confirm, as well as validate and question assumptions. They overwhelmingly prefer such personal contact throughout the transaction.

"Our results affirm that while small business owners continue to greatly value the professional advice and personal service of an independent agent, there is an expectation that their agent will be more capable of online interaction concerning their accounts and that the agency will have a fully credible online presence," said PIA National Executive Vice President & CEO Mike Becker.

"This is both an affirmation and a wake-up call for agents," he added. "Commercial lines customers want agents as experts who are backed by the efficiency of the Internet."

Input from focus groups

The research project included qualitative focus group research, involving business owners and insurance decision makers, conducted in multiple cities by research consulting firm The Pert Group, and quantitative research involving an online panel provided by Survey Sampling International, LLC (SSI), consisting of a random national sampling of 1,000 small-business owners with companies of 50 employees or fewer.

"Some studies backed by direct writers and captives had contended that buyers of small and midsize business owners policies (BOP) wanted to purchase such coverages online," said PIA Partnership Chairman John Petrucci. "We decided that a more objective picture of buyer preferences was required.

"The message is clear: The Internet is here to stay. It is not the opponent of agents," said Petrucci. "But while it can be a source for competition, it can also provide an opportunity for agents when they use it to their own advantage. Responding is about evolution, not revolution."

The changes taking place in the marketplace provide an excellent opportunity for independent agents to increase their dominance in the commercial lines market, he added, "but the one thing that is not an option for independent agents is inaction."

Detailed research results, along with agent-specific recommendations and tools developed through this research, are being provided to all members of PIA nationwide by The PIA Partnership.

Expert advice plus personalized attention

This project is a follow-up to The PIA Partnership's "Voice of the Customer—Personal Lines," an extensive nationwide survey of personal lines insurance customers. The new study reinforced that commercial buyers want what professional insurance agents offer: expert advice and counsel, personalized attention and interaction, the ability to offer comprehensive protection to meet individual needs and excellent, "relationship-based" customer service.

Additionally, the study found that the attributes that are most important to small businesses when it comes to their insurance are those offered by independent agents, including:

Belief in the person or company
Having a person who understands my business
Quick service response
Personal attention
Providing me with confidence that I am making the right insurance decisions

"Much has been said and written about plans by companies such as Google attempting to challenge the dominance of independent insurance agents in commercial lines," said PIA National President Richard A. Clements. "That's why we asked commercial lines customers what they want. We found they want what we provide, and that they also want us to provide more. As for competition, I say what agents have always said: 'Bring it on!'"

Check out the research findings, as well as resources for independent agents, here.

The PIA Partnership, originally established as the Company Council of Executive Officers (CCEO) in 1996, is a group of insurance companies that work collaboratively with PIA National to conduct research and develop tools and resources designed to benefit professional independent insurance agents.

Current PIA Partnership companies include: Encompass Insurance; Erie Insurance; Harleysville Insurance; Liberty Mutual Insurance; MetLife Auto & Home; Progressive Insurance; Selective Insurance Group; State Auto Group; The Central Insurance Companies; The Hanover Insurance Group; The Hartford; and The Motorists Insurance Group.

Special Reports /

Study: Small-business owners prefer digitally engaged, responsive independent agents

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