Our annual Independent Insurance Agent Survey is conducted in conjunction with the National Association of Professional Insurance Agents. (Adobe Stock)
The old adage, "attitude is everything," rings especially true when reviewing the results of the 2022 Independent Insurance Agent Survey conducted by NU's parent company (ALM) in conjunction with the National Association of Professional Insurance Agents (PIA).
Over the last year, independent insurance agents donned their business armor and enlisted an increasingly robust arsenal of digital tools to manage mounting business challenges that included negative fallout from pandemic coverage disputes; shifting to a largely remote workforce; helping clients prepare for and recover from increasingly severe catastrophes; finding and retaining skilled, diverse talent; facing increased government scrutiny; and readying their agencies for the future.
"Decreased commissions have really hit our agency," wrote one respondent to the 2022 Independent Insurance Agent Survey. "You can't make a decent living on 8% or 10% commission."
"Claims servicing has suffered tremendously since the pandemic," wrote another.
"Artificial intelligence will give internet companies a major edge as the public, for the most part, does not really want to deal with agents," noted a third.
And a fourth respondent simply stated that "Keeping up!" was among the most significant issues for today's independent insurance agents and agencies.
Solutions mindset
The survey found that independent agents overwhelmingly rely on relationships, great service and coverage expertise to differentiate themselves from the competition. The most-cited points of business differentiation were relationships (84.5%) and service (83.1%), which indicates that independent insurance agents are far less likely to rely on price competition in their marketing.
A steadily increasing cohort of independent agents also indicated that digital tools have become essential.
Many respondents pointed to the need for ongoing professional development. They said continuing education and especially technical training is "indispensable" to the agency's ongoing success. A majority of respondents (53.3%) require employees to earn designations and/or encourage employees to take continuing education classes. There's also a strong push to provide a monetary incentive to do so.
Other respondents mentioned product innovation and insurtech integration as the answers to tackling the evolving insurance landscape.
"My agency is small, which affects my ability to hire more experienced employees," one respondent explained. "Because of the size, I am unable to offer benefits such as health care and IRAs (but) I am working towards that goal."
Despite business challenges, many agents remain optimistic about the future. One such survey respondent pointed out that industry watchers have long called for the demise of the traditional insurance agency, and that digital solutions may not be as attractive to consumers as some may think.
"Twenty years ago, Time magazine said insurance agencies were a dying institution," this person wrote. "We are still here as people find out that waiting on line to talk with someone different every time is not so great… Independent agents are solid!"
Who responded?
There is a growing awareness within the insurance industry that in order to serve
a broad spectrum of clients, agencies and carriers must recruit, maintain and promote a diverse workforce. When asked how important a diverse workforce is to maintaining
healthy business, most respondents said that being inclusive is either "extremely
important" or "moderately important" to long-term success. Also of note: There was a slight decrease in the overall age demographic of this year's survey respondents, and there was a slight uptick in younger respondents as compared to last year.
Finances & strategy
Uncovering fresh business opportunities is of growing concern to today's independent agents and agencies. On the upside, responses to the survey questions about both agency production and gross earnings show continued improvement in 2021 as compared to 2020.
Significantly, this year's survey revealed a big increase in overall gross income earnings over a 12-month period. Comparing 2021 to 2020, the number of agencies reporting that their earnings increased rose by 19.2% (to 66.5%), and the number of agencies reporting that earnings declined went down 15.6% (to 16.4%).
This year's survey findings demonstrate that both agency production and earnings continue to improve, a trend that was noted in informal feedback from members of the National Association of Professional Insurance Agents.
Ted Besesparis, PIA's senior vice president of communications, and Mike Becker, CEO of PIA, contributed to this report.
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