If I've learned one thing about the P&C insurance industry over the years, it is this: If you really want to know what's going on in this business, you have to talk to the boots on the ground.
In 2017, NU forged a partnership with the National Association of Professional Insurance Agents (PIA) and Flaspöhler | NMG to conduct the inaugural Independent Agent Study — a research project designed to annually take the pulse of independent Property & Casualty insurance agents throughout the U.S. and provide revealing insight into the demographics, books of business and challenges they face, and reveal their most highly rated carrier partners.
Flaspöhler has long conducted its own larger annual study of agents (the Flaspöhler | NMG Producer Study) on behalf of key P&C carriers, which use the results to help them best meet agent needs.
This year's study has revealed several things worth drawing attention to, not the least of which is this: A good number of independent agents — the backbone of the P&C distribution system — aren't exactly feeling the love these days.
Only about 1 in 4 (24%) of PIA members who responded to the study said their insurance-carrier relationships were improving; about 1 in 5 (19%) said their relationships had declined. In the study sections where respondents were able to share their comments, some said that gone are the days of a longtime relationship between many agencies and their partner carriers, once held together by personal relationships with their reps. This, they know, is due at least in part to high turnover at many insurers. But it speaks to a larger disconnect by those who create insurance solutions from the people tasked with selling them; in the end, insurance is about people. It's about relationships.
It isn't like agents are the most needy people on Earth: They just want the power to do their jobs. When asked what indications of quality they value most in a commercial P&C carrier, 64.3% of our study respondents said "ease of doing business," which was the No. 1 response. That was followed by "fair, timely claims handling" (46.1%), "strong, knowledgeable underwriting" (38.7%), "superior customer service" (37.4%), and "consistent underwriting" (36.5%).
What do those numbers reveal? To me, they say that independent agents want to serve their clients quickly, effectively and with minimum agony. Carriers would do well to consider in their own workflows what can be done to better facilitate meeting those goals.
That's not to say that America's independent agencies don't have some room for improvement themselves, in some key areas. The chief one is the lack of perpetuation plans for agency principals. An astounding 45% of our study respondents said they planned to retire within the next five to nine years, most of whom were 50 and older and many of whom were agency principals. Additionally, 48% of our respondents said they do not have a set perpetuation plan for their agencies.
Listen, I get it. For many people who have made a career of selling insurance, that is their identity. Selling is not what they do; it's who they are. For that reason, it's difficult (and for some, unfathomable) for them to imagine a time when the sun will set on their careers; but that day will come, and unless agency principals want to know that their entire book of business may very well disappear in a fire sale after they die because they didn't plan ahead, then it's time to start taking steps to ensure its future — and the financial security of their loved ones.
The data included in the study are extracted from Flaspöhler's larger research study (upward of 300 pages), which the firm makes available to rated P&C commercial lines carriers. (Contact rick.flaspohler@nmg-group.com for more information.)
Shawn Moynihan is editor-in-chief of National Underwriter Property & Casualty. He can be reached at smoynihan@alm.com. The opinions expressed here are the writer's own.
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