Filed Under:Agent Broker, Agency Management

Why independent agents will always matter

(Photo: Shutterstock)
(Photo: Shutterstock)

The problem with conventional wisdom is that it is often wrong.

Conventional wisdom holds that Congress is paralyzed by partisan political gridlock. While that may be true to some extent, the idea that nothing good is happening on Capitol Hill may be overstated.

Lawmakers have been acting in bipartisan fashion on a host of insurance-related issues, in ways favorable to Main Street professional insurance agents and their customers. One example: In late October, quick, aggressive advocacy by agents prompted congressional leaders to pledge to reverse a severe cut of $3 billion to the federal Crop insurance program.

The cuts to Crop insurance were included in a budget agreement to raise the nation's debt limit. Once this came to light, agents and their allies blanketed Congress with messages urging that no cuts be made. Within just two days, House and Senate leaders went public with pledges to reverse the cut to Crop insurance when Congress takes up an appropriations measure to fund the federal government, which must take place by Dec. 11.

Related: $305 billion highway funding bill heads to Obama's desk

Quick, aggressive grassroots advocacy still works. When the people speak, Congress often listens and acts.

Conventional wisdom by various industry “experts” over decades also has yielded predictions of the impending demise of the independent agency distribution system for insurance. But this never happens.

Why? There are several factors. One is the adaptability and resilience of independent insurance agents, who are adept at not only reacting to change, but getting in front of it. Agents were among the first to fully embrace the use of social media to promote their agencies and market themselves in their communities. They were leaders in recognizing that Main Street is now online.

But the main reason that independent agents continue to thrive is that they provide what their customers want.

The National Association of Professional Insurance Agents' agency-company council, the PIA Partnership, has conducted two nationwide studies involving both surveys and focus groups of insurance customers to ascertain their buying preferences. One study looked at commercial lines and the Internet; the other examined buying preferences regarding personal lines. Both found that consumers overwhelmingly preferred doing business with local agents.

Our commercial lines survey results contained both an affirmation and a wake-up call for agents. While small-business owners continue to value the professional advice and personal service of an independent agent, there is an expectation that their agents will be more capable of online interaction concerning their accounts, and that the agency will have a fully credible online presence. Or, as Mike Becker, CEO of the National Association of Professional Insurance Agents, put it, “Commercial lines customers want agents as experts who are backed by the efficiency of the Internet.”

It turns out that when it comes to insurance, customers appreciate that it is a complex transaction that requires professional advice. They don't want to do it themselves because they don't have the expertise or the time.

Professional insurance agents are strong, nimble, adaptable and savvy. They provide exactly what their insurance customers want. That's one piece of conventional wisdom that is totally true.

Robert W. Hansen, Jr., LUTCF, CPIA, of Omaha, Neb., is president of the National Association of Professional Insurance Agents.

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