An agent's greatest source of competition? Carriers' direct sales via the online channel, according to a recent Accenture survey of independent agents.
The report, "Evolving to Compete and Win in the Long-Term," says that nearly three-quarters (71%) of the surveyed 1,158 U.S. independent P&C agents indicate that the threat took the form of lower prices, while 48% saw better brand recognition and more effective marketing as key elements of that competition.
Besides the rise of the direct channel, changing consumer behaviors and new technologies also disrupt independent agents' roles, Accenture reports, which include their top priority of retaining and servicing existing customers, and improving the customer experience.
The respondents further solidified their stance when asked on rating information. The agents gave the highest value on insights for existing customers, while qualified leads ranked last.
That's not to say that new business growth is far from a priority: When asked what they would do with more staff, finding new business ranked highest, followed closely by cross-selling and up-selling new business. However, budget concerns make hiring new staff a sizeable investment.
"Independent agents, as a group, carry enormous weight within the P&C insurance business, representing more than half of total premiums written in the industry," says Michael Lyman, global senior managing director for Insurance within Accenture Strategy, in a statement. "It is understandable that they are focused on keeping existing customers, especially in light of capital constraints that make it challenging for most agencies to add sales capabilities to grow their business.
New technologies can make agency operations more efficient, and the respondents most valued an effective carrier integration focused on web-based service and claims, and quoting. Agents gave a lower priority to digital marketing, which illustrates "a potential disconnect with the high premium they place on providing a better, more consistent customer experience," the report authors say.
It appears that agents understand where they need to invest, but because they do not regard digital capabilities as a top priority (it ranked 5th out of 12 in Accenture's survey), means that producers may struggle to achieve their primary objective of providing a complete customer experience. Indeed, Accenture Consumer-Driven Innovation Survey from last winter reports that clients prefer to interact with their insurance providers via digital channels, with 71% willing to purchase insurance online and 67% interested in insurance products and services offered through a mobile device.
"Leading independent agents will take advantage of innovative digital technologies and big data analytics to develop greater customer knowledge and insights, improve their ability to reach their target markets, and deliver a superior customer experience," says Erik Sandquist, managing director for Accenture Distribution and Marketing Services in North America, in a statement.
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