Toops Scoops:It's Still All About the Relationships

Yesterday J.D. Power and Associates came out with an interesting study of what independent insurance agents want in a carrier. The inaugural study was based on input from trade associations like PCI and IIABA, and more than 10 of the biggie insurers, including AIG, Allied, Chubb, Erie and others — in short, they wanted to know what drives agents to deal with a given insurer.

Although the study dealt strictly with personal lines, it paints a clear picture of what carriers can do to make it easier for agents to do business with them.

The results? In measuring agent satisfaction across six factors, the top three drivers were:

* Key carrier contacts (32 percent)
* Policy offerings (23 percent) and
* Claims (16 percent).

I spoke with Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates (and I'll be posting an interview with him on our Web site shortly), who discussed some of the other findings.

At a time when we're coming out of years of cutthroat competition, it's interesting to see that compensation played a fairly minor role in agents' decisions to deal with a carrier: Only 5 percent of the more than 1,500 respondents ranked it as a critical factor. However, technology and price were among the six leading factors, at 13 percent and 16 percent, respectively.

The low status of compensation wasn't the only surprise, Bowler said. In spite of the fact that the survey was conducted in November 2008, with the AIG bailout still fresh in their minds, respondents ranked AIG about in the middle for overall agency satisfaction.

And while products and price were important factors, Bowler agreed that the survey results sent out a loud-and-clear message about the importance of the relationships between the carrier and the agency.

“Personal contact is important, for example, the person who is the key liaison on underwriting is the carrier representative that the agent is dealing with,” he said. “If those folks are not accessible, and supportive and helpful by giving the right answers quickly, the agents will struggle to compete.”

And while technology is important, technology alone is not the silver bullet for agency/carrier relationships. “Some carriers do well on technology, but fall down from the people standpoint,” Bowler said. “A typical agency is appointed to 7 or 8 companies. If all the companies are passing out information but have modest training, the last thing an agency needs is to have to go through an extra process to understand the tools of the trade.”

Interestingly, the J.D. Power study seemed to echo some of the findings of the Big I's 2008 Agency Universe Study, in which 72 percent of respondents expressed overall satisfaction with their personal lines carriers. The Big I respondents ranked “making it easy for CSRs to write business,” “smooth quoting system” and “reputation with customer/prospects” as the three most improved areas for personal lines carriers — all areas that overlap with the J.D. Power driving factors.

Bowler indicated that J.D. Power was planning on conducting a similar agent survey for commercial lines. They're a great barometer for insurers to use in fine-tuning their relationships with their distribution forces.

What are the most important satisfaction factors in your carrier relationships? Take a survey on our Web page at:

http://www.agentandbroker.com/ME2/dirsect.asp?sid=E2D3EF32475B4172A42FEE249B241FD4&nm=%3Cb%3E%3Cfont+color%3D%22%23c00000%22%3E+%3E%3C%2Ffont%3E+Take+the+%3Cfont+color%3D%22%23c00000%22%3ESurvey%3C%2Ffont%3E%3C%2Fb%3E