Are P&C Insurers Failing Agents? - Insurance Thought Leadership

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October 13, 2017

Are P&C Insurers Failing Agents?

Summary:

More than a quarter of independent agents find the effort spent on administrative tasks to be a serious threat to growth.

Photo Courtesy of Pixabay

The difference from one year to the next can be astounding. Just compare surveys of independent agents from the end of 2015, with the same survey taken a year later at the end of 2016. Industry outlook improved significantly as 49% felt positive about the year 2017, compared with only 33% for 2016.

But…before we start doing the happy dance, let’s take a more in-depth look at the state of independent agents.

Not as Good as It Seems

Despite the hoorays and hoopla, we’re not uncorking the champagne just yet. There are still disconnects between independent agents and carriers over workforce efficiency. In a recent survey conducted by National Underwriters (NU) in conjunction with PIA, Flaspohler, 66% of independent agents rated ease of doing business as the number one consideration when selecting carriers.

EY sheds more light on this. Over a quarter of independent agents find the effort spent on administrative tasks to be a serious threat to growth, while 35% of agents told EY that they would stop, drop and roll for improved customer online tools, and 45% would stand on their heads for fewer forms and less paperwork. Furthermore, 60% of agents select carriers based on the quality of the tools they offer and 35% have left one carrier for another offering better options.

See also: P&C Insurers: Come Out of the Dark Ages  

Another major storm cloud on the horizon is product choice. Product choice significantly impacts the ability of agents to generate new business. In the NU study previously referenced, independent agents rated access to superior products and coverages 8 points in importance on a nine-point scale. As proof of changing consumer preferences, agents already report that demand for usage-based insurance and policies tailored to meet the needs of the sharing economy are escalating.

Putting the Numbers Together

Now that we’ve showered you with the rapid-fire numbers, let’s take a second to recap and focus on what it all means.

Agents are seeing demands for a wider selection of products, including new coverage types related to the sharing economy. As a result, nearly half see the ability to customize products to the needs of their customers as integral to their future success. Greater product choice is also a concern with 40% of agents saying they need products to fit a wider range of consumer needs.

Distribution is also a challenge. Digitally-enabled insurers are growing at 2.5 times the rate of their less- advanced peers. The difference between agents with strong digital capabilities and those still wading through complex forms and processes to quote, bind and issue products, is efficiency. Enabled with automation, digitally-empowered agents rapidly quote and issue products, meeting the needs of consumers expecting lightning fast distribution.

As a result, more than half of agents select carriers based on the tools and capabilities they offer. For instance, Progressive, an insurer recognized for embarking up the digital tree when it comes to empowering agents, was ranked number one on independent agents’ list of approved carriers.

While carriers fight aging legacy technology and costly, long new product development cycles, the world continues to spin and agents continue to award their business and loyalty to insurers capable of delivering the products they need in a seamless simplified transaction. Or, they take matters into their own hands, and find it themselves.

Doing it Their Way

Leading agencies are adopting a top-tier digital distribution platform with a tightly integrated market network of products. In doing so, they gain access to efficiency-enhancing digital tools and expanded product selection without taking on new carrier appointments.

Agents use the digital distribution solution to bundle their current carrier appointments with products from the market network. It happens seamlessly, in a single transaction and all that customers see is an agent who can offer robust product choice and then quickly and efficiently quote, bind and issue the coverage they need.

Benefits include:

  • Tightly integrated market network: Waiting for carriers to develop new products and provide appointments can leave agents holding the bag with customer satisfaction. A market network gives agents access to the products they need now, without obtaining additional carrier appointments.
  • Straight-through processing: PwC, in their recent report on the state of the P&C insurance market, proposed an interesting scenario: “…imagine a small business owner being able to enter just four pieces of information (e.g., business name, business address, and owner’s name and DOB) on a policy application and receiving a real-time business insurance quote with the option to immediately purchase and electronically receive policy documents.” Surprise, surprise, no imagination required with the right digital distribution platform, as automation prefills the application, quotes multiple product options and then binds and issues the coverage when the agent clicks the mouse. And it’s available for both personal and commercial lines.
  • Improved efficiency: Stop working on those speed typing records. With digital distribution, you won’t need them. Data entry is minimized, giving agents a shorter, more productive path to policy quoting and issuance.

See also: P&C Core Systems: Beyond the First Wave  

By selecting a digital distribution platform with a tightly integrated market network, insurers have improved agent efficiency, doubling quote volumes, converting 35% of those to sales and booking over 55,000 policies in a single year. Others who have started seamlessly bundling products from their own lineup with those from other carriers are selling 1.6 more of their own offerings, ultimately generating $70 million in premiums in under 10 months. Maybe it is time to start doing the happy dance after all.

To learn more about the power of product choice and digital prowess, download our infographic, A New Year, A New Insurance Industry.

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About the Author

Tom Hammond is president of U.S. operations for BOLT Solutions. He is an expert on innovation and distribution trends in the property and casualty insurance industry.

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