Study: Agency Satisfaction Linked to Amount of Business Sent to Insurers

By | March 26, 2009

  • March 26, 2009 at 7:22 am
    Darwin says:
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    Hello……….
    B.F.O. – Blinding Flash of the Obvious.

    In order to be paid, you have to “place” the “business”. If you don’t “place” the “business”, you don’t get paid!

    In order for an agent to place the business, the customer has to say “yes”. I don’t know about you, but in my 40 years, I’ve never had a customer say “yes”, based on my compensation. Anyone disagree? B.F.O.!

  • March 26, 2009 at 12:31 pm
    Doug says:
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    I’m surprised at the comment that satisfaction levels are high when an insurance company rep visits an agent at least once a month.

    I personally don’t mind a visit once or twice a year from a company rep to tell me things I may not know about how to write more business with them, but taking time out of my day to schmooze with multiple company reps once a month???

    I don’t know who responded to that survey, but I personally work for my clients, not for the insurers I represent, so I’d much rather spend more time meeting with my clients than with company reps.

  • March 26, 2009 at 12:52 pm
    BIG D says:
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    Doug, I couldn’t agree more. If your reps are like some of ours we usually tell them what’s going on at their own company.
    But those agents who are selling policies at 7.5% and 10% commission but like their company rep need to work for Obama.

  • March 26, 2009 at 1:41 am
    Peter Lashua says:
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    I think you have your order backwards.

  • March 26, 2009 at 1:48 am
    Doug says:
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    Now that you say that, I think you’re absolutely right. Their order of importance seems precisely backwards. Relationships with carrier reps/underwriters is extremely important when it comes to placing COMMERCIAL business, but I’d probably be a pretty happy camper if no personal lines company reps dropped for a surprise visit ever again. I wonder where they’re getting this information – probably from non-producing office managers that love rep visits because it gives them an excuse to get taken out to a long lunch or sit around and chat for half an hour.

  • March 26, 2009 at 1:55 am
    who needs commission? says:
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    i’m going to start a company. We will write everything,send a markting rep in once a week, never deny a claim. we will not be paying any commissions though since it’s really not all that important anyway.

    key carrier contacts (32%), policy offering (23%); claims (16%); technology (13%); price (10%); and compensation (5%).

  • March 26, 2009 at 2:24 am
    What if? says:
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    What if you wrote through a company that was interested in helping you grow your business, know your competition, save you money on ordinary business expenses, advanced you technologically, and worked your retention for you??? Would the cheapest price be most important then?

  • March 26, 2009 at 2:38 am
    BIG D says:
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    Hey, what if? You’re AIG aren’t you?

  • March 26, 2009 at 2:39 am
    Doug says:
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    RE: post by What if?

    Of course having a positive relationship with a carrier that is truly interested in doing all of the things you mentioned is a great thing, and I’ll be the first to admit that the company paying the highest commission is not always the best. Usually the ones paying higher commissions are doing so to help their competitive advantage because they fall short in other areas.

    However, the problem is that most company reps (at least the ones that come to visit me) are more interested in telling me things that I already know, responding to my concerns with “I’ll write that down and tell my manager,” and dumping all sorts of useless paper materials on my desk, as opposed to offering viable strategies to help me grow my business, save money, and increase retention.

    I’ve only visited with ONE company rep that ever gave me any useful information. The rest are simply annoying and I’m no better off after they leave than I was before they arrived.

  • March 26, 2009 at 2:45 am
    What if? says:
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    No, not AIG. Wanting to start a MGA and propose a consulting mentality to help agents grow their book. Curious about the independent agent’s mentality toward the lowest rates…don’t people understand that lower rates automatically equal lower commissions? Our hope is to change the philosophy of the agent to not sell limited, no coverage providing policies just because the rate is lower. We hope that the value we can bring the ENTIRE agency is worth a little work on the upsell.

  • March 27, 2009 at 2:52 am
    JB says:
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    The fact is that in personal lines… price, commission, quality of their service center and ease of use are the biggest factors in where business is placed. The carriers don’t really differentiate themselves enough from one another to expect to get the sale at a higher price. All of the top companies are pretty good… you cannot make much of a case for Travelers over Safeco, Allied, CIG, etc because their products are so similar. They each have some nice little bells and whistles (Safeco’s Teensurance or CIG’s 2X replacement cost) but all in all they are very similar in terms of coverage. If one comes out with something extra (indentity theft, roadside assistance, etc) then the rest are soon to follow.

  • March 26, 2009 at 2:55 am
    Doug says:
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    Smart agents don’t sell price, they sell VALUE, which is a combination of price, service, coverage, etc. I am not price-focused as long as I’m “in the ballpark,” but I’m not beyond offering an option that is more expensive because it has more VALUE. If everyone bought and sold everything on price, there would be no market for Mercedes or Rolls Royce in the auto industry. People buy VALUE, not price.

  • March 26, 2009 at 3:21 am
    ronny b says:
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    ..and if you believe commissions don’t matter, I have some excellent beachfront property for rent in nebraska if anyones interested.

    I don’t know of many ppl stupid enough to openly admit commissions are their driving factor…yet I see this in the marketplace on a daily basis.

  • March 26, 2009 at 3:32 am
    ted says:
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    Doug:
    As an underwriter, I really wish there were more agents that shared your views. I can’t tell you how many times i’ve seen business moved to a carrier w/ a cheaper price but that paid higher commission.

    Agents/Brokers need to start pointing out coverage differences and actually do their jobs rather than taking the easy way out and saying “bind with Lexington, they’re 1/3rd the price of everyone else”

    It seems a lot of the business I don’t write, goes to carriers that I know are paying higher commissions but who’s prices are much lower. It happens on a regular basis and i’ve actually had one on one conversations with some agents who openly admit commission is a deciding factor when placing their accounts. Why they’d admit to that is beyond me.

  • March 26, 2009 at 5:37 am
    Company Rep says:
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    I share your sentiments about this article being confusing. Most agencies that I visit would say that they sell based on “value” not price, but that service, commission, etc all play an equal role. Of course, the one thing you find with independent agencies, is that they are very different. Nonstandard agencies sell on price, do a poor job of educationg cusotmers, and are 100% different than the nice standard shops. So, without knowing what type of agencies were surveyed, it’s diffiuclt to lend the study any credibility. As far as company reps visiting once per month…I would flat out get thrown out! Agencies want visits every several months to let them know how they stand for contingency bonuses, software changes, ideas to generate growth, etc. But, like agencies, there are lots of good and lots of bad reps. Good ones won’t drop by unannounced, we respect your time, and have worked hard to educate ourselves on the industry and ways to help agencies grow their business.

  • March 26, 2009 at 5:40 am
    Big Ben says:
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    Did Progressive write this article?

  • March 27, 2009 at 7:16 am
    Happy Field Person says:
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    I would like to know which of you are in IL as I would then not bother with any of you and have you deal with the automated attendants to get your questions answered. Have a nice day!

  • March 27, 2009 at 7:35 am
    Doug says:
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    Darwin, you make a great point, but I think this article really focuses on the other side of the fence, i.e. what causes agents to place business with certain carriers, outside the realm of dealing with a client or prospect. For example, if I know that two carriers are offering comparable coverage, which one am I going to present to my prospect? If they’re both the same, I’ll take into account the carrier’s customer service, claims service, and commission, but I certainly don’t give a hoot about how often their company reps contact me.

    I think that when it comes to placing business with carriers, compensation DOES matter, because all other things being equal (which is key), of course I’m going to place business with a carrier that pays me more. However, all other things are usually NOT equal, which is why compensation is only one of many factors, and since I truly want to look out for my clients, compensation is NOT at the top of my decision-making checklist, and I’ve taken a smaller paycheck to offer a client a better quality product many times.

  • March 27, 2009 at 7:46 am
    Mark says:
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    Our time tested phylosophy is take care of the client and the commision will take care of itself

  • March 27, 2009 at 10:32 am
    Rick says:
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    I don’t want company rep’s visiting as they take too much of our time. As owner commission is most important as WE NEED TO MAKE MORE $ ON OUR PERSONAL LINES BUSINESS! This survey probably interviewed employees who do not have access to the agencies income statement. I cannot believe commission would be last with those in charge of making a success of the business.

  • March 27, 2009 at 1:34 am
    Lainie says:
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    Greetings, don’t know if any of you are NY agents; but the JD Power survey needs to be read by the NYS Insurance Dept. Their disclosure proposal is outrageous. Other states are sitting back waiting to see NY’s final proposal expected next week or two. Ins Dept thinks that we place based on compensation and our clients need to know how much we are paid. Every policy leaving our office has a disclosure statement. Only had 1 client ever ask and when he heard the dollar amount his response was “is that all”.

  • March 27, 2009 at 1:52 am
    Doug says:
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    After I bind a policy for a new client, I usually tell them myself how much money I make on their account, and when they realize that it’s almost NOTHING, I explain to them that I am in business to establish a long-term relationship with them, not just make a “score” on one policy, so I’m going to do what’s necessary to keep them happy for the next 10-15 years, because THAT’S how I make a living. It also gives me an opportunity to ask for referrals.

  • March 27, 2009 at 3:22 am
    Donna Summer says:
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    I don’t think we want communication with our marketing reps, so much as good communication with the decision makers on our policies – such as our underwriters.

    I can tell you I will try to place with the company that is responsive to me, where I have a good relationship with my underwriter, where the service & systems are strong, and that offers value to my clients.

  • March 27, 2009 at 4:16 am
    Jim says:
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    One of the earlier commentators stated that they got it exactly backwards. He’s 100% right.

    No agent in his/her right mind would want more time-wasting visits from marketing reps and none would consider compensation to be the least important factor.

    It makes you question the value of those J.D. Power awards. Maybe the cars that get “highest” ratings are the ones we should avoid.

  • March 29, 2009 at 8:37 am
    pillsbury man says:
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    I second that statement, do you enjoy talking with a customer service dept that can’t help you or you’re on hold for 20 min. what about when an underwriter is purely black / white with a decision…then who do you turn to. There is value to a company rep..most carriers value the relationship they bring to the table and listen to what feedback they offer. if we ” reps ” aren’t worry of regular visits..why not send all your business to Prog. oh by the way, no one mentioned donuts

  • March 30, 2009 at 7:20 am
    Doug says:
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    As far as I know, a carrier’s customer service/underwriting department and its marketing department are two completely different and unrelated worlds. If that’s not true, then the carrier reps that I work with have done a pretty bad job of showing me that the two are related.

    You’re going to have a very hard time getting me to believe that customer service and underwriting service would suffer without company reps. I wouldn’t expect a company rep to be able to influence customer service or underwriting decisions anyway.

  • March 30, 2009 at 8:36 am
    Road Warrior says:
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    For the placement of an individual risk I think this is spot on. I do however think that commission/contingency plays a major role in deciding weather to represent a carrier or not. The frequest contacts that are most vital are the working relationships – day to day contacts with underwriters and claims personell at the carrier. The rep’s job is to create a comfort level so when there is a big problem, the agent feels comfortable going to them for help instead of just going to another carrier. To visit monthly is a waste of time for both the rep and the agency – unless of course the agent & rep belong to the same golf course….then weekly visits are appropriate.

  • March 30, 2009 at 8:49 am
    pillsbury man says:
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    To Doug : if you had a rep worth his salary , dedication, work ethics and desire to help an agency grow his book with the co he represented , he / she would be involved with all aspects of what is going on in your shop. That is the way I operate.If I run into any issues during my visits, I get on the phone to get it resolved. Maybe I’m old school. Why would a company pay those expenses to only hold your hand and take you golfing. Now with that said the carrier needs to listen to people in that position and many only want to hire the eye candy to hand out pens and paperpads

    What would you like to have a ” rep ” do for you ………

  • March 30, 2009 at 8:52 am
    pillsbury man says:
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    Doug..what state are you in, are you referring to standard or NS carriers.

    are you willing to drop some names

  • March 30, 2009 at 8:56 am
    Doug says:
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    I’m in Florida. My Progressive rep is pretty cool but I don’t talk to him very often. Last time I saw him, he showed me some very useful ways to prequalify individuals and maximize the use of discounts on their quoting system. I have a rep for one non-standard auto carrier that doesn’t come by anymore because I barely write anything with their company… then I have two Florida-only homeowner’s insurance carriers that both send “eye candy” to throw some sticky notes and pens at me and tell me about all the underwriting guidelines that I already know like the back of my hand. My other personal lines carriers (mostly small FL-only homeowners) don’t even send reps!

  • March 30, 2009 at 8:59 am
    pillsbury man says:
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    that answers my questions to you and now I understand your comments but it’s not the way I operate and other marketing professionals I know.

  • March 30, 2009 at 9:10 am
    Road Warrior says:
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    This is a great topic – what do can company reps do to be effective in cultivating a great business relationship between the company and agency? Surely not visiting is not going to get this accomplished as Doug suggested previously.

    I know this is kind of off the topic of the article, but is there an insurance related social networking community out there to do these things – like facebook?

  • March 30, 2009 at 9:16 am
    Road Warrior says:
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    Road Warrior: I’ve looked for insurance-themed social networking and haven’t been very successful in finding it. When it comes to independent agents, I find that most prefer to hold their cards very close to the vest. I include myself in this category – I prefer that other agencies don’t know how big my book is or exactly what I’m doing to be successful. There are insurance agencies on every other street corner and it’s a very competitive market out there. The only agents I really communicate with are ones that I have a symbiotic relationship with (i.e. captive agents that refer business to me that they can’t place), agents that are much more successful than me and don’t see me as a threat, and agents that have a completely different market focus than I do.

  • March 30, 2009 at 9:55 am
    Happy Field Person says:
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    In response to your inquiries,

    Several of my agents have raved about Quantum Club, a marketing networking outfit that has some social aspects. The one social and professional networking group that I know of is the 1752 Club, which is defunct in most states now and is somewhat active here in IL. It is a group of marketing reps and agents who used to work on the carrier side to network and discuss various topics.

  • March 30, 2009 at 10:20 am
    Donna says:
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    I have heard about Quantum Club, which seems really positive and interesting but I believe you have to pay to be a member.

    Also, NAIW International has a new website for members that is pretty awesome, with profile pages and groups available, you can blog and send messages on it etc, so a great new networking tool.

  • March 30, 2009 at 10:20 am
    Road Warrior says:
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    Thanks – I have several agents in the Quantam Club and they are all very marketing minded people and they have some ideas that really seem like they would work, but from the underwriting standpoint, it seems like they try to fit square pegs into round holes more often than not – I have not witnessed a profitable Quantum Club member to date.

    As for the 1752 Club – I will check it out.

  • March 30, 2009 at 10:35 am
    mm says:
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    Personally I like Linkdin for this.

    There are several insurance related groups there. Unfortunatly my company blocks linkdin.com so I can not copy the names here.

  • March 30, 2009 at 10:37 am
    Donna says:
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    Oh interesting, I’m on linked in too. I’ll have to look for the insurance groups on there.

  • March 30, 2009 at 3:28 am
    Pacific NW Company Rep says:
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    Whether working with preferred or non-standard agents / brokers, professional company reps understand that your time is valuable and try to make it worth your time when visiting. I like to ask early on how frequently an agent thinks I should call on them and what is their preferred method.

    Good reps also understand that early in a company relationship more frequent visits are likely necessary to help answer questions, clarify company procedures, address frustrations, etc with your staff. Over time visits can be fewer and farther between because you really don’t need us as much when things are running smoothly (we like that too!).

    Good company reps will act as an advocate for your agency to resolve customer service problems for YOUR clients that aren’t being handled through normal channels. Happy customer = Happy Agent = Growth opportunity.

    Will unscheduled drop-by visits occur? Absolutely, but not with a high degree of frequency. Sometimes it is difficult to schedule out the entire day and when traveling to remote locations good reps want to maximize their time (and yours) even if it is to drop in for two minutes to personally ask “are we doing what you expect of us… or have we messed up?”.

    Your company rep is often the only one who steps up to the plate to regularly ask that key question, providing an opportunity for you to vent and for the company to repair an important relationship.

    Have never known an agent to place business because of donuts or notepads, but I’ve also never had an agency owner complain when I recognize the efforts of their staff by delivering lunch as a way of saying “thanks for placing your trust in us” or “I’m sorry things didn’t turn out well for that account you had to remarket”.

  • March 31, 2009 at 11:58 am
    JD Power Fan says:
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    I want to know which companies stood out. Why isn’t there an award? Erie is a pretty damn good company so I surmise that they are one of the top ones.

  • April 1, 2009 at 2:49 am
    JD Power Fan says:
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    Well, I know that in IL Erie is in many agencies that also have other carriers. They are also one of the few carriers that is not stealing business behind my back. What do you mean “excessive need?” Can you elaborate? Their underwriting is tough but fair…and their numbers speak for themselves. I do give you the point that their auto commissions are low, but commercial isn’t bad, and their retention is one of the best that I have seen.

  • April 1, 2009 at 6:52 am
    IA says:
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    ERIE???
    I had Erie a couple of years ago. The do provide decent service and product offering, but being an IA, I value my independence – Erie seems to be an Exclusive want-to-be kind of a company. Their excessive need to tell me where business was to be placed did it for me. I do just fine with out them and love to taking business from the other Erie agents in my area. The funny thing is, that when I take business from the other nearby agents that represent Erie, I usually put it with a carrier that I know the other Erie agents also represent. I bet Erie loved this article however because as for compensation, they are just as cheap as Progressive!!

  • April 3, 2009 at 1:04 am
    IA says:
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    I am in western NY. By excessive need, I mean if I’m writing 400 new accounts per year, the rep seemed ready to terminate my contract when they received about 150 apps that year. They expected 300 of the 400 apps, but they didn’t have the product or price to earn that much business. They operate with the captive agent mentality – place it with us, or don’t write it at all.

  • April 23, 2009 at 10:28 am
    JD Power fan says:
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    IA,

    True, they do have that “drink the ERIE kool-aid” mentality but my rep has been very good to me and assists me more than do the other reps (comes in to quote, will help with some inspections, sales calls, etc).

    I am also hearing some crazy rumors about ERIE being a possible player for Hartford or even American Family. What the heck is going on? Anyone else hear this?



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