2019 survey: Independent agents say challenges persist
Independent insurance agents shared their thoughts on a number of topics, including their biggest challenges.
In one of my favorite movies, “1776,” John Adams is standing in the bell tower of Philadelphia’s State House (the building in which the Second Continental Congress met) on the night before the vote on independence, asking himself, “Is anybody there? Does anybody care?”
That scene came to mind as I reviewed the results of our 2019 NU/PIA Independent Agent Study, conducted by Flaspöhler | NMG Consulting. I was most struck by the responses to the open-ended question, “In your opinion, what are the top three challenges facing competitors in your industry over the next 3-5 years?” The challenges noted by the 2019 respondents are similar to the answers in previous surveys. Over the three years we’ve been doing this survey, there have consistently been some tensions, although there is good news in the overall relationship between carriers and agents.
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Ability to compete?
Several respondents noted that they see increased competition from some carriers going direct to clients instead of through the traditional agent channel. As one respondent said, “Carriers that do not focus on [the] independent agency channel pose a direct threat.” We’ve also heard before from survey respondents that the marketing support they received from some carriers has been cut back, if not completely eliminated. Even with access to social media, smaller agents are finding it difficult to market themselves in a cost-effective manner.
Another concern for independent agents is their firm’s size and its ability to compete. They’re seeing challenges to their books of business from out-of-state wholesalers and brokers. They’re also finding it difficult to work with certain carriers due to premium volume requirements.
For agents in small towns or small markets, they see few opportunities to increase their volume, which further limits their options in placing commercial business for their clients.
Keeping up with technology
Several agents noted technology as a challenge, from keeping up with changes within the agency to working with carriers that appear to be using outdated technology. As one respondent put it, “Do not understand why some companies let the agents go around with a laptop and have the ability to interview and bind on the spot, while other companies take five days to look over an app.”
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Underwriting — primarily the lack of experience among underwriters — also surfaced as a challenge. “The dumbing down of new underwriters who don’t have experience and understand terminology,” is the way one respondent described the issue.
This observation resonated with me more than any other: “Creating uniqueness in a commodity-driven industry.” Insurance is becoming more of a commodity in personal lines. It’s interesting to find that agents have this perception in some commercial lines as well. So how do they keep insurance from being strictly a commodity, and how can carriers help?
At this point, one answer doesn’t fit all. The solution is likely to take effort from all stakeholders, including clients who need to see insurance as something customized for their needs, not merely a commodity.
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As you read the survey results, I hope you’ll take the time to share your thoughts. Do you agree with the challenges that our readers identified?
And that is what’s top of mind for me this month.