Filed Under:Agent Broker, Sales & Marketing

Sustaining customer relationships in an evolving insurance industry climate

Opinion: Will customer loyalty sustain traditional agency relationships, or will new technology and self-service capabilities be the primary drivers of policy?

Even with all the technology in use in the insurance industry, maintaining customer relationships is still key. (Photo: iStock)
Even with all the technology in use in the insurance industry, maintaining customer relationships is still key. (Photo: iStock)

Peter Drucker, legendary management and marketing guru, once said, “The purpose of a business is to create and keep a customer.”

I frequently travel across the country to meet with agents and brokers who tell me about the increasing number of challenges they face as they work to grow their businesses — businesses that serve a vital role in their communities. I’ve had the opportunity to understand these issues first-hand, which is the first step in creating stronger partnerships and helping agent and broker firms keep their communities safer and more protected.

Based on what I’ve learned from leaders of firms across the country, there are four key ingredients to creating successful relationships in today’s evolving financial services environment.

Responsiveness

Agencies, carriers and brokers alike know all too well that customer retention in the insurance and financial services industry is becoming an increasing challenge. Carriers that promptly respond to the needs of a broker are carriers that grow with brokers. A strong relationship is important, but this alone may no longer be enough to retain customers as their expectations for prompt, technologically driven solutions grow.

Moving forward, firms will need to meet and exceed those changing expectations. Carriers will also have an important role to play as they translate purchasing preferences into true risk-management solutions, competing to earn a spot within the limited shelf space that firms have available in a competitive market environment.

Related: Your ‘presence’ is critical to the insurance sales process

Flexibility

The property casualty market is changing rapidly; risks that were routine only a few years ago have increased in complexity, requiring carriers to demonstrate more flexibility than ever before. Firm consolidation trends are fostering the need for agents and brokers to demonstrate a deeper understanding of customers’ protection needs now more than ever.

Carriers are also being called on to provide greater flexibility in identifying solutions and product offerings that allow agents and brokers to provide their clients with options and choice in solving their risk management needs.

Related: 4 keys to sales meeting preparation for insurance agents

Innovation

It goes without saying; insurance is undergoing massive change. Agents and brokers have long worked to build a stable foundation across the industry to provide guidance and counsel to individuals and businesses with the goal of delivering both peace of mind and protection. However, industry disruption driven by technological advancements is triggering a change in buying behaviors.

Additionally, customers have more to protect and they want a solution that provides them with security in a high-tech environment. This shift in consumer behavior is driving existing carriers to double-down on technology to translate a consumer’s purchasing preferences into real solutions.

A tech-driven transformation is underway; new risks are being introduced into the market, such as autonomous vehicles (both personal and commercial), smart homes and the concept of ride-sharing, to name a few. To address these evolving market risks, Nationwide recently launched a $100 million venture capital operation focused on customer-centric solutions that help members:

• Live comfortably in retirement;

• Meet their insurance and financial needs in novel and digital ways;

• Protect their data and digital assets; and

• Protect themselves in the evolving area of mobility.

This is no time for “business as usual.” Innovation will create massive value, and opportunity, in our industry going forward.

Related: A design-thinking approach to innovation for creative insurers

Communication


Carriers that recognize these challenges are working to stay on top of the trends and are listening to their partners across firms. Communication is key: With ongoing dialogue and collaboration, we can design creative solutions like self-service options and quoting systems that improve customer satisfaction and allow firms to deliver best-in-class service. This focus will allow firms to maintain their reputation as valuable resources in their communities, exceeding customer expectations and ultimately driving industry growth.

Related: NU Agency of the Year Award, Town & Country Insurance: Writing it right

I believe that the more successful carriers will bring together superior service, creative customer options and a strong brand that will enhance customer retention. Carriers that offer expertise and breadth of products and services will present firms with a distinct advantage in serving their customers.

The broker’s role is critically important in cultivating customer loyalty. But success requires thinking differently. Investing in technological capabilities to stay current and allowing innovation to help drive creativity in the quote, decision-making and underwriting processes will be the signs of progress. And above all, firms that can evolve with customers to give them the breadth, depth, expertise and ease of doing business as their needs change will be able to maintain strong relationships.

Leading through this changing landscape and staying tuned into the evolving challenges that follow is how, together, we will create great experiences for producers and clients. Nationwide is committed to listening to our brokers and their clients; we are committed to being the most responsive to the needs of our producers; we will demonstrate flexibility where value is created for all parties, and we will communicate through the process. This has driven our success for more than 90 years, and with our focus on innovation and evolving with the insurance consumer we are optimistic about the future.

Mark Berven is president and chief operating officer of Nationwide Property & Casualty. Opinions expressed are the author's own.

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