A new study from the National Association of Professional Insurance Agents (PIA) has found that small-business owners strongly prefer independent insurance agents when it comes to making their insurance selections, but that those agents must continuously demonstrate their value as informed advisors and offer digital benefits.
"Small Business Insurance & The Internet—The Voice of the Commercial Lines Customer," the latest project of PIA and The PIA Partnership, offers independent insurance agents real intelligence on meeting the new challenges posed by online providers and direct writers.
Among the PIA's findings about what small-business owners want:
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In order to be competitive, independent agents must have a full, credible presence online.
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Small business owners most value agents with professional, industry-specific knowledge.
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Most small business owners who shop insurance online still lack confidence in their abilities to make ideal insurance choices, and they want help.
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Agents need to sell their value. Without more frequent demonstrations of value, alternatives like bypassing the agent by going online will encroach further.
The research showed that even when the insurance process starts online, small-business owners still want to depend on an agent to check and confirm, as well as validate and question assumptions. They overwhelmingly prefer such personal contact throughout the transaction.
"While small-business owners continue to greatly value the professional advice and personal service of an independent agent, there is an expectation that their agent will be more capable of online interaction concerning their accounts and that the agency will have a fully credible online presence," says PIA National Executive Vice President & CEO Mike Becker.
"This is both an affirmation and a wake-up call for agents," he adds. "Commercial lines customers want agents as experts who are backed by the efficiency of the Internet."
Input from focus groups
The research project included qualitative focus group research, involving business owners and insurance decision makers, conducted in multiple cities by research consulting firm The Pert Group, and quantitative research involving an online panel provided by Survey Sampling International, LLC, consisting of a random national sampling of 1,000 small-business owners with companies of 50 employees or fewer.
"The message is clear: The Internet is here to stay. It is not the opponent of agents," says PIA Partnership Chairman John Petrucci. "But while it can be a source for competition, it can also provide an opportunity for agents when they use it to their own advantage. Responding is about evolution, not revolution."
The changes in the marketplace provide an opportunity for independent agents to increase their dominance in the commercial lines market, he adds.
Detailed research results, along with agent-specific recommendations and tools developed through this research, are being provided to all members of PIA nationwide by The PIA Partnership.
Personalized, expert advice
This project is a follow-up to The PIA Partnership's "Voice of the Customer—Personal Lines," an extensive nationwide survey of personal lines insurance customers. The study reinforced that commercial buyers want what professional insurance agents offer: expert advice and counsel, personalized attention and interaction, the ability to offer comprehensive protection to meet individual needs and excellent, "relationship-based" customer service.
Additionally, the study found that the attributes small-business owners most value when it comes to their insurance are those offered by independent agents, including: belief in the person or company, quick service response, personal attention and insight into the right insurance decisions.
"Much has been said and written about plans by companies such as Google attempting to challenge the dominance of independent insurance agents in commercial lines," says PIA National President Richard A. Clements. "That's why we asked commercial lines customers what they want. We found they want what we provide, and that they also want us to provide more. As for competition, I say what agents have always said: 'Bring it on!'"
The PIA Partnership, originally established as the Company Council of Executive Officers in 1996, is a group of insurance companies that work collaboratively with PIA National to conduct research and develop tools benefitting independent agents.
Current PIA Partnership firms include: Encompass Insurance; Erie Insurance; Harleysville Insurance; Liberty Mutual Insurance; MetLife Auto & Home; Progressive Insurance; Selective Insurance Group; State Auto Group; The Central Insurance Cos.; The Hanover Insurance Group; The Hartford; and The Motorists Insurance Group.
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