Survey: Agents' morale high despite pandemic

We asked agents to rate the overall feeling and morale among their workforce on a scale of 0 ("terrible") to 10 ("wonderful"):

• Some 53% said morale is good (score between 7 and 10).
• 38% said average (4-6).
• Just 9% reported low morale (0-3).

The numbers are surprisingly good against the backdrop of declining agency revenues and personal stresses in recent weeks.

Each year, Channel Harvest conducts an extensive survey of thousands of independent agents around the U.S., with its 2020 report publishing in May. The separate pandemic poll of 200 agents was conducted April 15-16.

Revenue shifts

While morale is holding, the survey revealed that many agents are worried about the longer-term impact of policy cancellations.

About half of the respondents reported agency revenue is unchanged since the crisis started in early March. But some 41% saw a decrease. Ten percent actually posted an increase in revenue during the crisis.

Coverage topics

Business interruption coverage has been a top discussion topic for clients, 74% of respondents to the survey said. Customers also are asking about auto (50% of agents reported) and workers' compensation (38%).

Other coverages noted as top discussion items were commercial property and general liability (15% each) and health and home insurance (14% each). Loss-of-use on rental property also was cited as a top discussion topic by 7% of agents.

Communication tools

Agents were asked by Channel Harvest to consider their most effective methods for communicating about COVID-19-related matters with customers and answering policy or service questions:

• Email dominates, with nearly 90% choosing that as a top method to reach clients.
• Phone calls were next at 81%.
• Texting at 30%.
• Video chat and social media at 13% each.
• Fewer respondents cited agency U.S. mail and website content as their top tools.

Gloomy projections

In open-ended responses to the survey, many agents offered an unsettling outlook as the pandemic's economic impact unfolds across the U.S. Here are some related comments:

• "It's too soon to see changes in revenue. As the months grind on, I expect sharp declines as the out-of-work shed extra vehicles and optional expenses. Those who still are working are also likely to cut back on optional expenses."
• "The worst is probably yet to come for P&C agencies doing commercial insurance."
• "Activity has diminished for new policies; many calls about reducing existing policy premiums; slower pay of bills; reducing agency income. I reduced staff pay by 25% (lower hours) while working from home."
• "New business has come to a stop."
• "We have a lot of hospitality business, which has closed down, so we are lowering payroll where we can. I expect a huge reduction in income in the next three months."

Sunny outlooks

On the brighter side, many respondents to the Channel Harvest survey were optimistic about the new way of working from home. A sampling:

• "As insurance professionals, we have made careers out of being prepared for the worst-case scenarios. We were already prepared for staff to work remotely long ago, just in case there was ever a disaster that prevented us from accessing our office. Additionally, our flexibility has been a selling point for clients ― they are recognizing and acknowledging that our ability to work from home, provide them the same service level they have come to expect with minimal disruption, and our willingness to make accommodations for them — all of this is a service level that far exceeds anything they would get from a faceless online insurance provider."
• "We already had most of our staff working at least part-time from home as a way to reduce our footprint of necessary office space as we grew. So, switching to full-time work from home has not been too much of a stretch."

Channel Harvest will continue to poll agents in the months ahead. That's because it's possible agency staff morale and agency revenues will shift downward, given the following sobering scenarios:

• Firming prices. What news do agents hate to deliver as much as, "I'm sorry, you have no business interruption coverage for that?" How about: "Your premiums are going up." A hardening market in many — perhaps most — lines of business is underway. Great timing, right?
• Economic woes. Who knows when we'll recover from this mess? Carriers and agents could see a new wave of policy cancellations, nonrenewals, and fewer new policies as small business owners struggle to open and families curtail insurable purchases.
• Perfect storm. Working near the Atlantic or Gulf coasts? With weather patterns and ocean temperatures conspiring against the U.S. mainland, the number of hurricanes and tropical storms predicted for June 1 to November 30 is frightening.
• Social pressure. Consumers and business owners are expecting brands to help them out these days. Meaning: Show us the money. Lawyers and legislators are pressuring carriers to pay claims for which no premiums were collected. Meanwhile, will the 10% or 15% credits on car insurance premiums be enough to placate people?
• Big unknown. Not knowing how or if life gets "back to normal" is an issue swirling around the heads of agency owners. Will financial pressure and uncertainty spur an even stronger wave of early retirements and forced consolidations? Will nimble, innovative and virtual agencies rule the roost?

I don't have answers to these questions ― let's leave that to the experts — but I can say these are appropriate questions to ask right now.

Be safe and try to stay sane, my fellow insurance people.

Peter van Aartrijk (peter@Aartrijk.com) is CEO of insurance marketing firm Aartrijk, based in Fairfax, Va., and principal of Channel Harvest Research, which conducts an annual survey of what independent agents look for in a carrier relationship.

Read more:

• 2020 Agent Survey: Insurance agents and InsurTech
• 2020 Agent Survey: Today's insurance agent demographics
• 2020 Agent Survey: How technology drives competition