J.D. Power: Independent Agents Expect Volume Increase With Carriers

December 15, 2003

Independent insurance agents expect to see an increase in the number of policies written with the majority of insurance carriers in the next year, according to the inaugural J.D. Power and Associates 2003 Independent Insurance Agent Satisfaction Study.

The study asked independent agency principals to evaluate the agent-carrier relationship based on seven factors: policy offerings; key contacts/representatives at the carrier; compensation; claims handling; product information and training; cost and price of policies; and carrier technology.

The majority of the agents surveyed expect to do more business in the next year with the carrier they evaluated, while one-quarter of the agents expect business levels to remain unchanged. Not surprisingly, those agents anticipating increased business with a carrier are much more satisfied with the agent-insurance company relationship than are agents who expect unchanged or declining future business with a particular carrier.

Lack of communication related to product information and training is reportedly a key area in which independent agents express dissatisfaction with carriers. Agents are most satisfied with their carriers in the areas of key contacts, claims handling and policy offerings.

“While operating as independent businesses, these agencies still represent the sales arm of each carrier, and they want to be treated as such by being armed with the appropriate knowledge and skills to improve the sales and service experience to the end client,” said Jeremy Bowler, director of the finance and insurance practice at J.D. Power and Associates. “Given the current dynamics of the market, it is not surprising that the cost and price of policies, along with carriers’ compensation structures, are also areas in which agents provide carriers with low marks. Although agents express dissatisfaction with several aspects of their interactions with carriers, as a whole they are very optimistic about the future and plan to increase their business with the most supportive carriers.”

Among carriers evaluated in the study, agents give Auto-Owners Insurance particularly high marks for each of the seven factors of the agent-carrier relationship. Conducting business with nearly two-thirds of agents surveyed, Progressive, the largest writer of private-passenger auto insurance through independent agents, also receives favorable marks from agents.

The 2003 Independent Insurance Agent Study is based on responses from more than 1,600 independent agents across the United States and includes the largest national property/casualty insurance carriers that write personal and commercial business under the same brand name.

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