AUGIE Survey: Price Main Driver When Placing Personal Lines Risks

NU Online News Service, May 25, 9:00 a.m. EDT

LAS VEGAS--Agents and brokers cited price as the main driver in 2010 when placing personal lines business, eclipsing both "ease of doing business" and insurance product offerings, according to the latest ACORD-User Groups Information Exchange (AUGIE) survey.

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

The survey was released here during the 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 said products.

In the previous AUGIE survey in 2006, ease of doing business was the top driver for personal lines placement.

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

For large commercial lines risks--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 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."

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://www.property-casualty.com/Issues/2006/21/Pages/SEMCI-Remains-Elusive-For-Many-Agents.aspx?k=AUGIE+and+2006 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.

Also in the 2010 survey, respondents were 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.

All top-eight companies received over 30 top-three votes, with Travelers receiving over 1,000.

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.