Drive Insurance Survey Asks Young Agents Their View on Industry Challenges, Opportunities

August 31, 2006

The future of any industry, including the independent insurance agency system, depends on the successful development and advancement of today’s young professionals.

One event designed to help young agents master the skills needed to grow their businesses, is the National Young Agents Leadership Institute, put on by the Independent Insurance Agents & Brokers of America, which gets underway in New Orleans next week. To coincide with the conference, The Drive Group of Progressive Insurance Companies conducted a countrywide online survey of young independent insurance agents to find out what they think about everything from business growth opportunities and technology to the skills necessary to succeed and the challenges faced by the industry.

More than 750 young independent agents responded to the survey. Drive Insurance followed the industry’s definition of young agents – those 40 or younger, or those who have been in the industry less than 10 years.

Here’s what they had to say:

Young Agents on Success, Challenges and Succession

The top five skills needed to become a successful independent insurance agent were:
1. Product and risk management knowledge
2. Sales skills; People management skills (tie)
3. Initiative; being a self starter
4. Business management skills
5. Empathy for customers

The top five most significant challenges faced by an independent insurance agency were:
1. Attracting new customers
2. Increasing competition from companies selling direct
3. Finding and retaining good people
4. Having the variety of markets and products to meet customers’ needs
5. Retaining existing customers

On Succession
Of all young agency owners or principals surveyed, the majority (67 percent) have a succession plan in place in the event of a planned or unplanned absence.

Why an Agent?
When asked why they became an independent insurance agent, the reasons most young agents surveyed replied: To own my own business (26 percent); because it was a family-owned business (18 percent); and to help consumers/the general public (15 percent).

Young Agents on Growing Their Business

The three most important ways young agents attract new business were:

Personal Lines
1. Referrals from existing customers
2. Cross selling new coverages to existing customers
3. Traditional advertising/marketing (e.g., local print, direct mail, printed yellow pages, telemarketing, etc.)

Commercial Lines
1. Referrals from existing customers
2. Cross selling new coverages to existing customers
3. Referrals from other organizations and area professionals

Where the Growth Is
Ninety-three (93) percent of young agents surveyed are targeting personal lines as a growth area while 75 percent are targeting commercial lines.

Young Agents on Technology

The top technologies young independent insurance agents use to manage/grow their business were:
1. Carrier Web sites
2. Agency Management System
3. Downloads from carriers
4. Real-time interfaces with carriers
5. Comparative raters
6. The Internet for prospecting, selling or informational purposes

The Technological Advantage
The majority of young independent insurance agents (79 percent) say technology has been significant in helping them grow their business.

Only 11 percent of young independent insurance agents have an interactive Web site where people can quote, buy and contact them. Thirty-four (34) percent have a static Web site where people can learn more about their agency and the services they provide and 40 percent don’t have a Web site at all.

Young Agents on Carriers

The five most important things carriers can offer an independent insurance agency were:
1. Competitive rates
2. Technology that helps them more easily write business and service customers
3. A variety of markets and products (auto, home, umbrella) that meet customers’ needs
4. Competitive commissions
5. Support provided by dedicated service personnel via phone

Nearly all agents (94 percent) say a carrier’s commitment to building a brand on behalf of independent insurance agents is important.

Source: The Drive Group of Progressive Insurance Companies

Topics Carriers Agencies Trends Tech

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