While insurers need to do a better job involving their producers in strategic and operational decisions, such communication must be a two-way street, with agents and brokers keeping their carrier-partners in the loop about where they stand.
I emphasized this point during a webinar hosted by Deloitte, which examined the results and implications of a "Producer Satisfaction Survey" the firm conducted last year in partnership with NU.
If you recall, when we first published the survey results in our Nov. 9, 2009 edition, I quoted the movie "Cool Hand Luke" and opined that "what we have here is a failure to communicate."
The survey found that while carriers tend to consult more frequently with bigger producers than with smaller ones, even the biggest complained they were not "often" included in decisions on key areas such as marketing and claims. (See my Nov. 9, 2009 editorial, "Can We Talk?" at http://bit.ly/aro2er).
Later on, in two separate live events, Deloitte and NU invited carriers, big brokers and Main Street agents to hash out the results. In one roundtable discussion, I noted that some carriers shrugged off producer dissatisfaction as "the nature of the beast"–arguing that no matter what they did, producers would never be satisfied with them. (See my Feb. 1, 2010 editorial, "Keep Producers Happy," at http://bit.ly/a48GW4).
That's the wrong conclusion, I insisted at the forum, arguing that any dysfunction in the insurer-producer relationship could be repaired. Indeed, "Producers! Can't live with them, can't live without them!" is NOT the lesson carriers should take away from our survey with Deloitte.
However, in preparing for the Deloitte webinar on "Re-Energizing Agent and Broker Channels for the Next Growth Cycle" (available at bit.ly/c3jKBw), I realized this message had to be directed at producers as well as carriers. Agents and brokers need to make clear where each insurer fits into their marketing schemes.
If carriers are expected to make a long-term commitment to a brokerage or agency, and allow them to take part in strategic planning and be kept informed about underwriting, claims and other operational issues, the insurer needs to know they truly are in a long-term relationship.
In a soft market this is quite challenging, as it's tough for a producer to keep a client with a carrier charging more than another bidder. But if the company is sound financially, has been flexible on coverage and is reliable on claims, producers should do all they can to keep clients with their carrier-partners.
Insurers also point out that since they usually generate 80 percent of their business from 20 percent of the distribution force, they can't possibly include every producer in their inner circle.
True, but carriers must help develop the next generation of smaller, younger producers. Carriers should scout the same way as any good sports team–looking for those who are raw but talented, who could benefit from additional education and professional development. Such prospects might become your star producers and be part of your top-20 percentile someday.
Carriers, agencies and brokerages should also look to diversify their sales teams by gender, race and ethnic background. With the distribution force aging and overwhelmingly white and male, neither side can afford to ignore the needs of an increasingly heterogeneous marketplace.
That said, it's hard for carriers to take any of this partnership talk seriously if producers don't reciprocate. There has to be a happy medium. Those true partners who find it will thrive.
Sam Friedman
Editor In Chief
You can respond to this column on Sam's Feb. 24 blog entry at www.NUSamSoapbox.com. Follow Sam on Twitter at http://twitter.com/NUSam.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.