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Reliable quotes and the mind of the small commercial agent

By Rick Stoll January 12, 2018

Verisk survey of small commercial insurance agentsHumans need reliability and desire accuracy. We like to see ourselves as rational creatures, and because of that, we prize exactness. We want to know that what we believe aligns with what’s true, and that carries over into how humans conduct business.

Accurate data is valued

Accurate data is held in high esteem because it translates into reliable information. Reliable information turns into precise knowledge, and knowledge drives business decisions. Because it’s critical to positive business outcomes, precise knowledge is fundamental—and indispensable.

Verisk surveyed independent insurance agents who work in the small commercial market to gain insight into their thought and decision-making processes when dealing with small commercial insurers. We asked them several questions regarding their relationships with insurers and what their perceived pain points were. Agents identified reliability of quote as their number one concern, even more important than prefilled loss runs, lower number of data inputs, and—yes—commission rates.

Reliability of insurance quotes

When asked about the reliability of quotes they receive from insurers, respondents said the quotes were unreliable 41 percent of the time. Such a high frequency of uncertainty is unpalatable to agents and makes it more difficult to do their job. Frequent errors in quotes will frustrate agents and label an insurer as difficult to work with. That’s bad for the insurer because agents will take their business to carriers that are easier to work with instead.

Many insurers rely on a network of independent agents to do the legwork insurers don’t have time for. That’s why they need to make it easy for agents. Agents and insurers have a symbiotic relationship: Insurers turn to agents to free up time to focus on core business. For agents, working with insurers is their core business, and they need to do so with speed and efficiency.

Inconsistencies found

When quoting small commercial policies, there are many opportunities for inconsistencies to occur. Perhaps the business location or NAICS code is incorrect, or maybe you have the wrong businessowner information.

Are you unable to provide the most current details of the business’s operations, including annual revenue? Any of these negative plausible scenarios can turn agents off.

With as many as 40 percent of small businesses not carrying insurance, it’s obvious the market represents an enormous opportunity for insurers. That’s the case for agents as well. Forty-three percent of agents surveyed told us that, when dealing with a client, they typically source quotes from three different insurers. Surprisingly, agents don’t go with the insurer that pays the highest commission rate. They’d rather work with the insurer that reliably and quickly returns reliable quotes.

It’s potentially more profitable for you to make it easier for agents to operate with speed and focus. If you want to grow your business with your agents—and who doesn’t?—think of agents not as short-term vendors but as long-term trusted business partners. Providing them with correct quotes from the outset, eliminating their need to cull through discrepant information, can help you become the agent’s go-to insurer.

For more information on our straight-through processing solution for BOP, please visit our website or view our web seminar.


Rick Stoll is vice president for commercial underwriting products at Verisk. You can contact him at rick.stoll@verisk.com