Enhancing agent relationships is key to carriers’ revenue growth
Carriers that want expedited growth in commercial lines must create an efficient experience for independent agencies and the end consumer.
Independent agents (IAs) continue to drive direct-to-consumer insurance sales, especially for commercial lines. A 2020 report noted that IA companies wrote nearly 85% of all commercial line premiums. Carriers that up their value proposition to IAs by providing them market information and modern technological tools are best positioned to tap into this growing revenue stream.
Consumers are not just demanding but are expecting the efficiency and ease of online shopping. Knowing there is a human behind that online experience matters when buying insurance, particularly in the world of small-midsize commercial lines. However, online customer experience and efficiencies often fall on the shoulders of independent agencies that make a very small amount of commission on these policies. They seldom have the luxury of time and an IT department to develop solutions that allow them to scale their operations appropriately to be profitable in this low-margin segment of the industry.
Carriers have made good progress in the world of personal lines, finding solutions that allow agencies to be profitable in what, in most cases, has become a bulk business. Providing rates to online raters and quote and buy portals have come a long way in many avenues and, in particular, the end consumers experience using them. The same advances have not been experienced in the small-midsize commercial lines world; thus, many agencies are shying away from these lines of business or, if they are playing in this world, are often not very profitable.
At the agency level, they can certainly make investments — and should — in both their digital and customer experience that incorporates both the human and automated touch to create the desired client experience. However, a carrier that wants to see expedited growth in this area would do well to focus on technologies that create a satisfying and efficient experience for both the agency and the end consumer. Many independent insurance agencies are the core of their communities and are advocates for them, so particularly in the world of small-midsize commercial insurance, the loyalty very much lies with the agency, not the carrier.
Improving carrier-agent relations in commercial lines
What can carriers do to enhance their relationships with IAs, whose first loyalty is to their customers? Studies show that IAs want clear information about carriers’ policies and claims processes, lead-generation tools to build clientele, and marketing assistance to retain those customers. Digital tools that ease product training, drive sales and cross-selling produce high levels of satisfaction for agents.
Agents need to keep their finger on the pulse of many different carriers and policies, so it’s a competitive advantage to make sure a carrier’s best IAs know the nuances of products, particularly in the small to midsize commercial lines world. IAs who are well-versed in a carrier’s line of products and the changes in both appetite and the associated coverages within a given policy or package are more likely to sell that carrier’s policies to their customers. IAs who are focused on a particular niche find this is much easier to accomplish than those who are not. Carriers that find the best ways to not only communicate with their IAs but to get them engaged will benefit from the expedited growth of the IA’s book of business.
Carrier-sponsored informational webinars and educational opportunities ensure their product line is top of mind when IAs are sorting through multiple options for their clients. Recognition programs that reward the most prolific agents help inspire loyalty and enhance IAs standing with their own clients. IAs are responsible for creating their own marketing materials and email campaigns, and carriers that can support and streamline those efforts will allow agents to concentrate on personalizing customer relationships.
Generous commissions, while always an attractive incentive to agents, are not the only consideration for a technologically savvy new generation. Technology tools are increasingly in demand, too. A carrier’s investment in technology that gives IAs the ability to tailor policies and transaction support will help agents sell more of that carrier’s policies. Adding easy-to-access features that go beyond insurance coverage, such as live online quotes, digital claims submissions, 24-hour access to helplines and startup business support, are differentiators that enhance the customer experience and make an IA’s job easier. Many of these items are in full use in the personal lines world but are in their infancy in commercial lines.
Invest here, carriers, you will see dividends!
IAs value their freedom to work with who they like, to be able to source from multiple carriers and to offer tailored policies to their customers. Encouraging the most productive IAs to delve deeply into a carrier’s line and giving them the tools to make their jobs easier is a worthwhile investment. An informed agent who can deliver custom policies quickly and at the best price earns a lucrative return for carriers.
Opinions expressed here are the author’s own. This article is printed here with permission.
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