Strengths and Weaknesses, Part 1: What Agents Think of Regional, National P/C Insurers

By | June 25, 2008

Regional carriers rate better in underwriting experience, relationships and stability as well as in customer service and agency relations than their national competitors in the view of independent agents. Regional insurers also beat out national insurers when it comes to products for personal lines or small commercial lines. But national carriers perform about the same or better with products when the risks get larger. Regional carriers also come out on top in agency compensation and claims services, while nationals outscore regionals on loss control and technology.

More than 400 agents and brokers responded to an Insurance Journal weeklong survey in June on regional and national insurance companies. Agents offered perspectives on how regional and national insurers rank on everything from products and pay to technology and field representatives. Part one of this two part report reveals the results on customer service, agency relations, underwriting and insurance products. Part two of the report — to appear in IJ’s July 2 magazine as well as on IJ.com — will discuss the survey’s results on claims, technology, compensation, marketing and advertising strengths and weaknesses.

Overall
Regional carriers overall scored better on customer service and agency relations. “Regional carriers try harder [and] are more committed to building relationships with their agents,” one agent wrote.

Nearly two-thirds feel that regional carriers do a better job on overall agency relations than national carriers. Some 42 percent said regionals rank very good or excellent (24 percent) at agency relations, with an average rating of 3.78 out of five. Agents rate nationals as either good (38 percent) or very good (32 percent) with an average of 3.11 out of five.

The survey calculates average ratings based on a scale of one to five, where one equals a “poor” rating and five equals an “excellent” rating.

Another agent said national carriers tend to lag behind regional carriers in implementing change. “Regional carriers listen to the local agent.”

When it comes to overall customer service from regional carriers, agents rate them as either very good (45 percent) or good (33 percent) with an average rating of 3.61 out of five. National carriers are either good (39 percent) or very good (33 percent) with an average rating of 3.14.

Despite their differences, one agent commented that both national and regional carriers “have their place” in the market. The “size of the account really drives the choice between regional and national,” he said.

Underwriting
Agents consistently rank overall underwriter relationships and stability at regional carriers high. The vast majority rate underwriter relationship at regional carriers as either very good (41 percent) or excellent (31 percent), with an average rating of 3.95 out of five. Regional carriers’ underwriter stability also rank high with 39 percent claiming stability is very good or excellent (24 percent), with an average rating of 3.75.

“Regionals are more sensitive to individual agency needs,” one agent wrote.

Another commented: “You cannot develop a relationship with the national carriers as you have too many underwriters handling different lines, i.e., small business, middle market, construction, technology and each of these has a separate new business and renewal underwriter and a separate associate underwriter.”

Some 41 percent rate regional carrier underwriters’ knowledge and expertise as very good or good (27 percent), with an average rating of 3.71. The average rating for national carrier underwriting knowledge and expertise came in at just 3.31, while some 37 percent rated knowledge and expertise as good, or very good (36 percent).

One respondent noted that large national carriers still have the best claims service and financial strength but added: “Compensation, agency support and underwriting expertise have suffered greatly, however. We find that many of their so-called underwriters are really nothing more than keypunch operators with too little training and little or no decision-making authority.”

National carriers do not fare as well in the underwriting categories. More than half of agents rate underwriter relationships as good (34 percent) or very good (29 percent), but only 6 percent rate relationships as excellent, with an average rating of 3.05. National carriers’ underwriter stability averages just 2.84, while respondents say stability is just good (32 percent) or average (29 percent).

One respondent commented: “The nationals are just not understanding of the way value deals are successful … [They] are driving to larger representation and missing the real need to develop agency level key relationships. From where I stand, they are no longer in touch with their key partners.”

Products
Agents place a higher value on regional carriers’ products than those of national carriers, except for large commercial and workers’ compensation.

Regional carriers’ auto (44 percent) and homeowners products (38 percent) are very good with an average rating of 3.62 and 3.63, respectively. National carriers’ auto and homeowners products rank only slightly behind. The average for auto products came in at 3.41 and homeowners at 3.22. Some 39 percent rate national carriers’ auto products as very good, while 34 percent rate homeowners products as very good.

Agents rate small business products about the same whether from national or regional carriers. Some 45 percent rate regional carriers’ small business products as very good (average rating of 3.61), while 41 percent believe the same of national carriers’ small business products (an average rating of 3.38).

National carriers improve their standing when the subject turns to large commercial products. Half (50 percent) taking the survey report that national carriers’ large commercial products are very good, with an average rating of 3.62. Just 34 percent believe that regional carriers’ large commercial products are good, with an average rating of only 2.78.

National and regional carriers score about even on workers’ compensation products. About one-third of all respondents (34 percent) report national workers’ compensation products as very good, with an average rating of 3.21. However, 29 percent score regional carriers’ workers’ compensation products nearly as good, with an average rating of 3.15.

Latest Comments

  • July 10, 2008 at 7:34 am
    Bartman says:
    It has been and always will be an agents job (or any salesperson) to say, "Yes" to whatever the clients wants and it has been and always will be an underwriters job to say, "N... read more
  • June 30, 2008 at 9:34 am
    Super Fly! says:
    Carriers cut back on quality and high service levels to be able to lower price and sell on price. Carriers would LOVE to offer higher levels and invest in that value-add, howe... read more
  • June 26, 2008 at 6:43 am
    Mark says:
    unfortuatly these days many people will sacrifice service and quality for price. Fortunatly there are also still many people who wont make that sacrifice, but for how long? th... read more
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