As insurers look to bolster their distribution networks, they may find it easier to attract and retain agents if their claims systems are up to par. In fact, quality claims handling by insurers seems to matter most to independent agents, according to a recent study conducted by the Professional Insurance Agents Associations of Connecticut, New Hampshire, New Jersey and New York State Inc. (PIACT, PIANH, PIANJ and PIANY respectively). The partnership of the four state trade associations represents independent insurance agencies, brokerages and their employees throughout their respective states.

More than 450 member agents responded to the four state associations’ inaugural Benchmark Survey, which tested the validity of 16 standard performance items used in the organization’s Company Performance Survey, an annual survey that gives PIA members the opportunity to rate the companies they represent.

“We want to be sure that the Company Performance Survey and its results are effective tools for members assessing insurance companies,” said Diane Fowler, executive director of PIACT, PIANH, PIANJ and PIANY. “The Benchmark Survey gave our agents the chance to tell us exactly which factors matter the most in their businesses.”

Agency principals rated “adjust claims fairly” and “pays claims promptly” as the two top factors when evaluating an insurer. Surprisingly, the oft-discussed issue of compensation levels was not among the top-10 considerations.

“Quality of service clearly overrides the ‘profit-only’ motive that agents are falsely accused of being driven by,” said Jim Pittz, business issues director for the four state associations. “A smooth claims process allows independent insurance agents to help their clients quickly.”

Besides the two claims-handling factors, the principals awarded their highest average ratings to criteria involving communication, underwriting and service. Rounding out their top-10 list, in order of importance, are:

3. communicates clearly, honestly

4. resolves issues quickly

5. underwriter knowledge, experience

6. listens, responds to agents

7. easy, intuitive technology

8. stable markets

9. consistent underwriting

10. competitive pricing

“Making clients whole is the fundamental promise our members sell,” said Ellen Kiehl, Ph.D., PIA senior research analyst. “The survey results confirm how much a company’s follow-through matters to its agents when there’s a claim.”

Of 456 people who participated, 355 were agency principals. Others in the agency could describe themselves as sales, service or underwriting staff. Across the board, all staff ranked claims handling highly: both fairness and promptness made everyone’s top priority list.

Additionally, underwriter knowledge level, underwriting consistency, clear communication and quick issue resolution were all high-scoring attributes. Agency staff members in particular expressed value in having “go-to” company contacts for underwriting and service.

“Our results show agents most value execution where the fundamental elements of the insurance business are concerned,” said Pittz. “Claims, underwriting, service and communication all win points with agents.”

PIA’s 2009 Company Performance Survey will launch in May in a new format, shaped by the results of the Benchmark Survey.

“Companies take the feedback they get from their agents via our surveys quite seriously,” Kiehl said. “This year, besides their individual performance, companies will have a chance to see how they are doing in areas judged most important by agents overall.”

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