As the insurance industry continues evolving rapidly and emerging market trends drive continued disruption, insurers face significant challenges. Outdated technology, lengthy approval processes, and internal operations can combine to make doing business painful.
Creating solid partnership with agents
To compete effectively, speed to quote is essential, and that's one reason insurers rely on agents to help get to market with speed and focus. Creating a strong, solid partnership with agents requires significant effort from you and the agents. But how much do you know about agents you work with? Do you really understand what motivates them?
You might assume that, when dealing with insurers, agents are motivated primarily by commissions. However, according to a recent Verisk agent survey, that's not true at all.
Verisk surveyed independent agents working in the small commercial market and asked them a variety of questions pertaining to their working relationship with various insurers. What we found surprised us. Commission rate was not the most important factor agents consider when deciding to work with an insurer. Our respondents ranked commission rate fourth after accuracy, speed of quote, and ease of submitting an application.
On the survey, a mere 10 percent of respondents rated commission as their number one concern. What was unexpected was that, when asked if they would accept a lower commission rate in exchange for a flawless experience with an insurer, more than 39 percent indicated they would, especially if the insurer's application response information was reliably accurate and quickly delivered.
What it means for insurers
What does this mean for insurers? It means you may have a unique opportunity to improve the effectiveness of your agent relationships with a more streamlined process.
To speed that process, you need to make sure that the application response or proposal information the agent receives from you is accurate and returned quickly. Currently, respondents told us that a bare majority of quotes they receive from insurers are reliable. They also complained that they must wait too long for approvals of online quoted risks. Creating a more efficient means of returning accurate quotes to agents would go a long way toward earning an insurer a preferred partner designation from an agent.
The ability to work well with agents can help insurers to profit in the small commercial market. According to a McKinsey survey, almost 40 percent of sole proprietorships in the United States don't have small commercial coverage. That means there's a tremendous opportunity for insurers to write BOP and other small commercial policies. Penetrating and growing in this new market is time-consuming, but relationships with trusted agents can help reduce your workload and increase your speed to market.