Insurance Agents Think They Offer Value. But Some Customers Have a Different View.

August 7, 2020

Business owners and consumers are rethinking their finances and insurance needs due to the current economic uncertainty. However, new research suggests insurance customers and their agents are not always on the same page; there are gaps between what agents and their customers think and agents may not be giving customers everything they want.

Thus insurance agents face some challenges when helping customers, according to a report from Nationwide Insurance. At the same time as they face these new obstacles, agents have a “compelling opportunity to serve as a knowledgeable resource for current and prospective customers to strengthen and grow their portfolio or business,” the report says.

Nationwide identifies four themes in its study:

  • A perception gap: There are gaps between agents and customers when it comes to perception of service levels.
  • Customers want more than just property and casualty support from agents.
  • Understanding policy coverage and price are shared challenges across all audiences.
  • The economy is a concern, and customers are looking to agents for guidance.

“Our latest research shows some emerging opportunities in the agent-customer relationship particularly when navigating this current environment and economy,” said Jeff Rommel, senior vice president of Property and Casualty sales at Nationwide. “But while the data pinpointed gaps, agile agents will see ways to address their clients’ concerns, enhance retention and grow their business.”

A Few Tips for Agents: Set up regular calendar reminders to check in with top commercial lines clients every six months to understand the challenges their business is facing and evaluate evolving insurance needs. Reach out to all personal lines customers at least once a year. Ask your carrier partners for tools to talk to clients about employee benefits, loss control, retirement planning. Nationwide’s My Loss Control Services and the Nationwide Retirement Institute are two resources. When you touch base with clients, brainstorm insurance scenarios together to identify potential gaps and where business continuity and disaster planning may help. Help your clients understand that price is only one of several important considerations when evaluating insurance. Look to your carrier partners to share technical expertise and resources to help you advocate for your clients and provide safety resources that mitigate their risks. Explore telematics products with both commercial and personal lines clients. Share your knowledge and research on the state and future of the economy with customers.

A Perception Gap

There is a perception gap in the value agents believe they are bringing to their customers. Agents are confident they are meeting the needs of their customers, yet some business owners and consumers have a different perspective on the services agents should provide, indicating gaps that can be closed:

  • 95% of insurance agents believe they are always there when their clients need them but only 79% of customers felt the same.
  • While 91% of agents said they can offer the best prices, only 74% of customers agreed.
  • 94% of agents reported they are regularly checking in with their customers to make sure their policy fits their needs. However, only 69% of customers reported sufficient check-ins from their agent.

What Customers Want

The research identified areas where agents can go above and beyond traditional insurance guidance. While most customers seek counsel on conventional insurance, some business owners are looking for help on succession planning, disaster recovery and employee benefits. Additionally, general property/casualty customers are asking agents about retirement and banking advice.

  • 57% of mid-market business owners are asking about employee benefits.
  • 45% of mid-market business owners and 35% of small business owners are asking about safety and loss control.
  • 26% of consumer customers want guidance on retirement planning.
  • Physical location is something customers value. While there is a desire for digital platforms, small business owners (68%), and consumers (51%) still prefer to have an insurance agent where they are physically located.

Shared Challenge

The research identified two consistent challenges across all audiences surveyed – understanding policy coverage and finding the best price.

  • 46% of small business owners, 71% of mid-market business owners and 47% of consumers said it is a challenge to understand what is and what is not covered in their policy.
  • 44% of small business owners, 69% of mid-market business owners and 45% of consumers said it is a challenge to find the best price for protection needs.
  • Similarly, 55% of agents say they struggle educating clients on the coverage they need and 46% of agents say providing the level of service customers demand is a challenge.
  • Many customers also wrestle with understanding different types of coverage, the time it takes to settle a claim, insurance terminology and understanding how much coverage they need.

Nationwide Research Methodology:

Nationwide commissioned Edelman Intelligence to conduct a 20-minute quantitative online survey among a sample of 2,600 U.S. independent insurance agents, small business owners, mid-market business owners, mid-market business owners with fleet vehicles, African American business owners, Hispanic business owners and general consumers between June 9 – June 25.

Agents reported it particularly challenging to:

  • Adopt new technology to keep up with the industry (55%)
  • Understand the nuances between different industries (53%)
  • Help clients with disaster prep or mitigation practices (51%)

An Economic Outlook

  • Over half of agents think their clients feel uncomfortable talking about economic uncertainty. However, more than half of business owners and consumers feel like their agent was prepared to have these discussions.
  • 47% of agents are optimistic the economy will recover in the next year but 66% are concerned about making it through this economic climate.
  • 81% of agents say their customers are unsure how the current economy will impact their business and their insurance needs.

Topics Agencies Property Casualty

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