COVID-19 accelerates shift from agents: J.D. Power

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J.D Power's most recent study shows consumers are shifting away from agents for P&C insurance distribution due to COVID-19. Customers are redefining their expectations for their insurance carriers, and direct-to-consumer companies have been quicker to respond.

The U.S. Independent Agent Performance and Satisfaction Study, which was developed in alliance with the Independent Insurance Agents & Brokers of America (IIABA), find “misalignment and poor execution continue to place agent-based carriers on their heels in their ongoing battle with direct-to-consumer insurers as the channel of choice among modern property and casualty insurance consumers,” J.D. Power says.

Thirty-six percent of agents say they were unaware of their carriers’ efforts during the pandemic. About four in 10 agent customers were contacted during the crisis, while slightly more than half of direct customers said the same.

The U.S. Independent Agent Performance and Satisfaction Study is currently in its third year, evaluating the evolving role of independent agents in P&C insurance distribution, general business outlook, management strategy and overall satisfaction with U.S. insurers. More than 1,800 agents were surveyed.

Independent agents still write 58% of all P&C policies, but that percentage is buoyed by commercial lines: Only 31% of personal lines auto, for example, is through the independent agent channel. And digital channels are increasingly preferred across the value chain from customer to agent. More than three-fourths of consumers say they would be open to working with virtual insurance agents to perform core insurance activities.

According to Tom Super, head of property & casualty insurance intelligence at J.D. Power, “The effects of COVID-19 have highlighted the importance of personalized insurance as consumers seek help navigating their way through this period.” Super continues, “Ironically, in many instances it was direct-based carriers, which have made a concerted effort in recent years to emulate the high-touch and high-quality agent experience, that were able to step up and deliver during this crisis. The independent agent channel should use this as a learning experience and redouble efforts toward improved alignment, execution and efficiency to drive more beneficial customer outcomes.”

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Agents Customer experience Customer service IIABA Commercial lines