Are agents responsible for communicating rate increases?
Rate changes can push insurance professionals to become more agile.
The Insurance Information Institute (I.I.I.) is known for insightful information and analysis on the property & casualty side of the insurance world. The organization recently pointed out that homeowners insurance is going up (again) — continuing at a rate beyond general consumer prices.
“Homeowners insurance premium rates are rising faster than inflation, S&P Global Market Intelligence data shows, and Triple-I’s chief insurance officer says they’re likely to keep climbing,” I.I.I. Senior Research Analyst Jeff Dunsavage wrote in a blog post. “From 2017 through 2020, premium rates are up 11.4% on average countrywide, according to S&P.”
The National Association of Independent Insurance Agents (PIA) also covered this issue prominently in a recent member newsletter and linked to a story in The Washington Post on the same topic. Value Penguin, an insurance information company owned by LendingTree.com, also recently published a thorough infographic/web page about the rate increases in homeowners insurance.
This trend begs the question: Are insurance brands, or more specifically independent insurance agents, responsible for proactively communicating with insureds and prospective insureds about the state of homeowners and other insurance prices?
Agents chime in
Thirty years ago, in a simpler time, I recall hearing leaders tell their insurance troops not to share bad news; only answer customer questions.
What about now: Is it a valid tactic to stay silent about difficult insurance news? I asked a few agents to chime in on this question. Their response are collected below.
Tracy Cotton of independent agency Starr Mathews in Georgia would vote down the ‘silence is golden’ approach:
“We ABSOLUTELY as a brand, as an agent, as an industry, need to be proactive in communicating with insureds and prospects what is going on with premiums. We need to be more honest, empathetic and transparent. I’d personally like to know more as an agent if the [Triple-I] can correlate this increase in rate with an increase in weather-related claims, or are there other homeowner-caused issues increasing claims (like being home more during the pandemic?), etc.”
“The buying public already has been conditioned to be more price-savvy and more research-driven in their insurance purchases. So help educate them on what is going on and what to expect.”
Amber Payan-Inclán, CLCS, owner/agent of Inclan Insurance in southern California and Arizona, added:
“I believe all insurance brands and agents have a responsibility to proactively communicate with transparency what issues that the insurance industry is facing to both our clients and prospective clients. Using a proactive approach, we often ‘fight fewer fires.’”
“When we operate this way, our clients’ perception toward us tends to be much more positive. This creates trust, loyalty, increased sales and long-lasting relationships.”
Robert Klinger, LUTCF, CPIA, owner of Klinger Insurance Group in Germantown, Md., opined that the independent agent channel can shine in circumstances like this. When carriers send out renewal notices without specifying why rates are going up, agents have the responsibility to proactively communicate, he said:
“We’ve come up with things on Facebook and Instagram to educate consumers on why homeowners and auto insurance rates are going up.”
“What we need is partnership between carriers and the independent agent channel to communicate with customers and prospects.”
Agent value
For my part, I’d argue from a brand perspective that independent agents’ strengths revolve around knowledge of the insurance markets and ability to customize coverage.
Insurance rates play a significant role in both of those factors. So agents can only increase the brand value they provide by sharing with customers and prospective customers about insurance prices (a primary factor in shopping and purchasing decisions).
As rates go up, so too can the insurance professional’s agility in communicating about them.
Charles Wasilewski (charles@aartrijk.com) is director of media relations and content writer for Aartrijk, a branding and marketing communications firm that specializes in working with carriers, managing general agents, tech firms, industry business partners, and member organizations in the independent agent channel.
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