When Captive Agents Go Independent - Insurance Thought Leadership

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November 9, 2021

When Captive Agents Go Independent

Summary:

From the client to agents to the carriers, the benefits of going to an independent model are clear -- but the transition is tricky.

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The insurance industry was caught flat-footed by the business impact of the COVID pandemic. Many agents were still relying on in-person contact with leads and customers to maintain their business, but world events and industry trends have aligned to push agents into the digital age. 

Along with world events uprooting business norms, increasing expenses and changing client expectations, independent agencies are facing another pressure — a tsunami of new competition. Last year, Nationwide released all its captive agents in favor of the independent model. This industry shift, very likely to be a trend in the coming months, makes branding and marketing even more important. Finding ways to stand out and showcase one’s expertise is critical to finding and retaining clients.

And while some carriers are keen to release their captive agents to reduce internal costs, the carriers still want to keep those relationships as independent agents (IAs) build their own books of business. After moving to an IA model, Nationwide reports that its formerly captive agents increased new written premiums by 35%.

Insurance customers want more choices, IAs value the freedom to make their own business decisions and carriers reduce operating costs. From the client to agents to the carriers, the benefits of going to an independent model are clear.  

However, this transition isn’t as simple as just turning all agents loose. The steps that Nationwide took leading up to this change are what positioned the carrier and its agents for success. Nationwide continues to provide support for those agents selling their products. The company provides a vast library of resources on their website, many of them related to marketing. 

This is probably one of the biggest differences for new IAs. For the first time, they are going to have control over their brand and will need to market themselves to stand out. This can be a time-consuming task and an ideal place to leverage technology. Digital marketing solutions can take the load of client communications off IAs so they can focus on helping customers. 

Traditional methods of acquiring customers can still bear fruit but can be costly and inefficient. To grow one’s book of business, IAs must approach client acquisition, cultivation and retention tasks with a modern eye. Embracing digital customer communication technologies will allow IAs to demonstrate authenticity and expertise that scale. Identifying your niche and segmenting your clients so you can communicate with them with the right information when they want it is key to deepening those relationships.  

See also: A Commentary on Agents & Brokers

Because the entire insurance marketplace has moved online, this is where IAs need to be to meet new leads and engage with existing clients. A website, email communications, text messages, ebooks, webinars, videos and social media can all be supported by digital tools. 

New IAs can select from templates and customize them to fit their specific market segment — taking the fear of staring at a blank page out of the equation. Messages can even be automated so new IAs can “set it and forget it” when it comes to consistent customer updates. Leveraging technology can ease the load put on a new IA agency, streamlining processes and showing a quick return on investment. 

Nationwide’s successful transition is sure to be a model for other carriers. As the market swells with IAs and continues to advance toward online channels, the time to adopt digital solutions to remain competitive is now. Technology can provide additional flexibility, efficiency and personality into the mix for IAs as they work to grow their own book of business.

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About the Author

Joel Zwicker is insurance evangelist at Agency Revolution Suite company and formerly an insurance agent at one of Canada’s largest independent insurance agencies. He now works to provide independent insurance agents the best marketing tools for their unique needs.

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