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In a reversal from four years ago, agents and brokers cited price as the main driver when deciding where to place personal lines business in 2010, eclipsing “ease of doing business,” the latest AUGIE survey revealed.

The importance placed on price is a “validation of how today's economy is impacting the placement of business,” observed Lisa Goth, vice president of the Charles P. Leach Agency and head of the AUGIE Survey Committee.

The ACORD-User Groups Information Exchange (AUGIE) survey was released here during last week's ACORD LOMA Insurance Systems Forum.

For the survey respondents–the vast majority of whom were agents and brokers–35.2 percent identified price as the main driver when selecting a personal lines company, while 28 percent said “ease of doing business,” and 12.8 percent cited products. In the previous AUGIE survey in 2006, ease of doing business was the top driver for personal lines placement.

Products rated last as a factor in both the 2006 and 2010 surveys for personal lines, but both studies showed products to be of increasing importance for commercial lines risks.

Indeed, for large commercial lines exposures–defined as accounts with over $100,000 in premium–the majority of respondents cited products as the top driver in both the 2006 and 2010 surveys.

When sharing the results of the 2010 AUGIE survey, Ms. Goth emphasized the progress of the “Real Time Campaign.”

According to the campaign's website www.getrealtime.org, “real time is the ability to click on a button from a client file in your agency management system or comparative rater for immediate access to carrier information on that client.” (For news on another survey about real-time usage, see page 19.)

Ms. Goth said a major reason for the campaign was a 2006 AUGIE survey response citing “duplicate data entry” as producers' top timewaster (46.6 percent of respondents).

(In NU's May 29, 2006 article on the last AUGIE survey, it was reported that “the Holy Grail of property-casualty insurance–single-entry, multiple-company interface–remains more of a dream than a reality for a significant portion of disgruntled independent agents, a survey of intermediaries has revealed.” See http://bit.ly/axLlDP for the full story.)

The 2010 AUGIE survey did not use the wording “duplicate data entry” as a response to its top timewaster question, but it offered a similar response of “learning and using various company proprietary systems.” While this remained the top timewaster for producers in 2010, the number of respondents saying so dropped to 27 percent.

Ms. Goth credited this drop to wider adoption of real-time processing.

She said 75 percent of agent and broker respondents now use some type of real-time system, with 89 percent of those who do use it stating that it saves them time.

For personal lines, respondents saved an average of 60.3 minutes a day. Commercial lines respondents saved 43 minutes per day, the survey found.

Ms. Goth also pointed to the difference in the 2006 and 2010 responses to a question about the difficulty agents have in securing quotes from insurers, and whether that difficulty affects how many carriers agents approach for a price quote.

In 2006, 32.9 percent strongly agreed and 39.3 somewhat agreed that difficulty in securing a quote impacts how many carriers they approach. In 2010, 22 percent strongly agreed and 40 percent somewhat agreed.

Ms. Goth said real-time adoption has helped reduce this number.

For carriers, 44 percent said they offer real-time rating, 63 percent offer real-time downloads, 32 percent offer real-time endorsement processing, and 47 percent offer real-time inquiry.

“There is definitely an opportunity for carriers to increase their [real-time] offerings,” said Ms. Goth.

“Day in and day out, agencies operate in multiple workflows because of the various ways insurance companies want to exchange information,” according to Cal Durland, CPCY market development manager and AUGIE facilitator at ACORD–a Real Time/Download Campaign sponsor.

“Broader carrier implementation of real time based on ACORD standards will provide a more consistent workflow, one that uses the agents' technology to access company systems,” she added in a statement. “This will deliver faster response, fewer errors and, most important, more sales.”

“Carriers have done a good job working with vendors to build out inquiry and service capabilities, and real-time personal lines quoting is growing rapidly,” said Jeff Yates, executive director of the Agents Council for Technology, part of the Independent Insurance Agents and Brokers of America, another campaign sponsor.

“Agents want more carriers to focus on endorsements, providing 'deep link' functionality that takes them directly to the company endorsement completion screen to make changes,” he added.

Meanwhile, as much as respondents understand the significance of technology, old ways die hard, the survey found.

While 80 percent of respondents said more than 50 percent of their job requires the use of technology for collecting information about prospects, more than half said they still begin the process with pen and paper.

Respondents were also asked to rank their top-three carriers that have implemented technology resulting in ease of doing business.

Travelers Insurance Company received the most top-three votes, followed by Progressive Group, Hartford Insurance Group, Safeco Insurance Company, Allied Group, Peerless Insurance, CNA Insurance and Cincinnati Insurance Company.

Of the 4,794 respondents who started the survey and 3,826 who completed it, 87.3 percent identified themselves as agents or brokers. An additional 10 percent were carriers, with the remaining respondents consisting of solution providers and association officials.

For the agents and brokers, 90.6 percent said they were independent agents, while 7.3 percent said brokers.

The next AUGIE survey will be in 2014.

Special Reports /

AUGIE Survey: Price Main Driver When Placing Personal Lines Risks

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