Eat less, lose weight. Contact your agent regularly, expect more profitable business. That seems to be the message from results of an inaugural study conducted by J.D. Power and Associates that measures the satisfaction of independent insurance agents and agency staff with the personal property/casualty insurance companies they represent. Agent satisfaction was examined across six factors. In order of importance, they are: key carrier contacts (32%), policy offering (23%), claims (16%), technology (13%), price (10%) and compensation (5%).
Ensuring that efficient, courteous and knowledgeable contacts are available, along with the ability for an insurer to offer various types of insurance policies that meet diverse customer needs, had a particularly strong impact on overall agent satisfaction with insurance companies, according to the 2009 Insurance Agency Satisfaction Study, which was released today.
Although it may seem that compensation would be the primary driver of agent satisfaction, in fact, elements that are related to agent support and products are the key differentiators, said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates. Insurers that provide helpful and knowledgeable business contacts and provide a variety of policy offerings help to better meet the needs of consumers, which leads to greater levels of satisfaction among agents.
The study finds that agent satisfaction typically increases the more often agents interact with the business contact from their insurance company. Agents prefer to receive business contacts via phone or e-mail at least once or twice a month. However, satisfaction levels are particularly high when the business contact visits more than once per month. In 2009, fewer than 15% of agents report receiving such frequent visits.
Contacting agents on a regular basis to provide support is critical for an insurance company, particularly when it comes to business growth, said Bowler. Agent satisfaction is very closely linked to the overall business growth of an insurer, as agents have tremendous influence over policyholders when it comes to switching providers. In fact, 60% of consumers report that they would follow their agent recommendation to switch to a new insurance company. Clearly, agent satisfaction can have a major impact on policy growth for an insurance company.
In particular, as agent satisfaction increases, the likelihood of agents increasing their premium business with an insurance company also rises. In 2009, nearly 70% of agents with satisfaction scores averaging more than 800 points on a 1,000-point scale indicate they intend to increase business with the insurance company. In contrast, only 28% of agents with scores averaging 600 points or less indicate the same.
Offering a marketing or advertising budget also greatly impacts agent satisfaction, according to the study. In 2009, nearly 60% of agents report that they did not receive any budget for local marketing or advertising. However, among those agents who received and used all of the funds provided by the insurer for advertising and marketing purposes, satisfaction scores averaged 808, compared with an average of 692 among those agents who were offered no funds for such endeavors.
The study also finds that satisfaction declines considerably as the amount of time it takes for insurance companies to notify agents of a customer-filed claim increases. When agents are notified on the same day that a claim is filed by a customer, satisfaction averages 781. When notification takes place within one or two days, satisfaction declines to 724 on average. Satisfaction declines further to an average of 638 when insurers wait more than five days before issuing notification.
It is clear that consumer satisfaction increases dramatically when the agent is involved in the claims process, said Bowler. However, it often falls to the insurers to notify their agents of a customer-filed claim in a timely manner in order to help agents be successful in satisfying their customers.
The 2009 Insurance Agency Satisfaction Study is based on responses from 1,589 insurance agents evaluating more than 10 insurance companies across the industry, including companies such as AIG, Chubb, The Hartford, Liberty Mutual, Progressive, and Travelers. The study was fielded in November 2008.
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