Quality claims service continues to be the top factor in how independent agents evaluate their carriers, although insurers’ financial strength ratings are now a much bigger concern for agents than in the past, 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.
Claims services topped the list of qualities agents look for, just as it did in last year’s survey — underscoring the importance agents place in carriers that resolve claims efficiently. Nearly two out of three agents called claims service a “critical” factor they look for in carriers.
Insurers’ financial strength ratings ranked second most-important in the survey, a significant jump from the number five spot that factor ranked on a previous survey by Channel Harvest last year in which independent agents rated national carriers.
Nearly half of those polled said financial strength ratings were critical. The jump likely reflects recent dramatic instability in the entire financial services sector, including the government takeover of AIG.
Competitive pricing was third most-valued, slipping from the number two position on last year’s list. Underwriting, too, is a major concern for agents: Nearly half of the top 10 involved some aspect of underwriting — from flexibility and availability to expertise and clarity.
“Agents placed the highest importance on things that matter to their customers, not themselves,” said Kevin Jenne, project manager for the survey and research director for co-sponsor Aartrijk. “They clearly prioritized things such as claims service and pricing over the service and compensation they receive.”
The survey revealed a number of key findings about agents’ attitudes toward the carriers they represent.
The importance of compensation is a major finding, particularly in that it ranked less important than most other issues. Compensation to agents was well down the importance list, ranking nineteenth out of the 24 issues covered by the survey.
The survey also revealed that only some carriers are meeting agents’ expectations. Insurers are meeting expectations only on having dedicated underwriters. Carriers on average significantly underperform on several items in the top 10, including claims service quality, underwriting responsiveness, and competitive pricing. However, there are some super-regional carriers agents listed who meet and even exceed agents’ demands in these areas.
The survey also found that agents tend to favor super-regionals over larger and smaller carriers in nearly every measured attribute, including pricing, customer and agent service, compensation and even marketing support. This appears to reflect a preference for companies that are big enough to meet their needs for coverage, technology and so forth, while not being perceived as uncaring or bureaucratic as some national carriers. This preference is reflected in their placement: Agents on average place more of their business with super-regionals than with either nationals or small carriers.
One agent, commenting on his preference for a super-regional company over a larger national carrier, said he “wanted a company that would give us more local sales and underwriting support and that would give us a voice when situations would arise that would be challenging. We’d feel we’d have a voice with a large regional carrier, more than a national carrier who didn’t give us the time that we felt we deserved (or) needed.”
Also, independence is vital: Several large carriers with strong brands have angered agents with indiscriminate agency appointments and direct sales. These agents generally praise the strengths of these carriers, but adamantly oppose the carriers’ competing with them or undercutting their sales efforts.
About the Survey
The survey was conducted by Channel Harvest — a partnership between Aartrijk and Campbell Communications — and sponsored by Insurance Journal. Insurance Journal will report more selected findings of the survey, such as agent attitudes on industry issues, in subsequent articles.
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.
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