Main Street businesses may still be trying to recuperate from the recession, but independent insurance agencies report that it has not been as disruptive as initially predicted, an exclusive survey reveals.
The survey — “How Independent Agents View Carriers: The Super-Regionals” — polled nearly 1,100 agents in all 50 states, and asked 100 questions about various aspects of their relationships with the carriers they represent, and ranked those responses in 24 categories. It’s the first survey of its kind that focuses on agents’ views of “super-regional” carriers, which form the middle ground between national and local insurance companies.
As part of the survey, respondents were asked questions about the recession because it is a topical subject, said Kevin Jenné, project manager for the survey and research director for co-sponsor Aartrijk. “We’d heard of some people concerned about people and businesses dropping some coverages to save money, but it doesn’t appear to be widespread at all.”
Financial stability appears to be a concern — carriers’ financial strength moved up to the No. 2 spot from No. 5 in last year’s survey in agents’ list of concerns. Nevertheless, the recession appears to be less worrisome, with few agents seeing dramatic effects.
Only about 20 percent of agents said they had seen major increases in policy cancellations or non-payment, with most seeing only minor increases. About half (54 percent) said these problems should return to normal within 12 months. More than half of agents said that their customers are taking less drastic cost-saving actions, such as increasing deductibles.
Some customers of independent agents have taken actions in response to the current economic recession gripping the United States, although in general the effect on the insurance industry is probably less severe than other industries are experiencing. “Reactions are much more conventional — increasing deductibles to save some money, not dropping altogether or failing to pay premiums,” Jenné said.
Only a few agents reported seeing major or drastic increases in their customers’ canceling policies or failing to pay premiums. When consumers have to save money, canceling insurance is a relatively painless way to do so (although poor risk management), but so far this hasn’t been a major problem, respondents indicated. For those agents who say they have experienced this problem, a majority believe things will return to normal within a year.
The survey indicated insurance customers are applying less-extreme tactics to reduce their costs. Just more than half of agents said their customers are increasing deductibles to reduce their premium expenses. Fewer than half of agents said that their business customers are becoming grossly underinsured or uninsured, or self-insuring to save money.
“Considering we keep hearing about the recession every day — that this is the worst since the Great Depression — customers are taking fairly low-key tactics,” Jenné said. “This survey reminds us of the benefit of measuring opinion instead of relying on anecdotal evidence.”
About the Survey
The survey was conducted by Channel Harvest — a partnership between Aartrijk and Campbell Communications — and sponsored by Insurance Journal. Insurance Journal reported on selected findings of the survey in previous articles such “Carrier Size Matters But So Do Price, Underwriting and Service” and “Claims Service Is Tops for Agents When Evaluating Carriers.”
The survey instrument covered more than 100 separate questions. A total of 1,098 agents responded to the survey and passed validation criteria. For most general questions in the survey, the number of responses yielded a margin of error of 3 percent at a 95 percent confidence level. Quantitative survey results are presented in a variety of formats, including rankings of frequently used carriers, ratings of individual carriers, and comparisons of carrier ratings.
The “How Independent Agents View Carriers,” is the second in a projected series tracking agents’ views on issues in the insurance marketplace. For more information on obtaining the survey report, contact Peter van Aartrijk at peter@Aartrijk.com.