In this soft market, it’s no secret that carriers are openly courting their distribution network, looking to drum up new agency principals and producers. What may be an eye-opener, however, is why agents and producers choose to represent certain insurers over others.
According to a survey entitled “2010 Survey of Agent-Carrier Relationships,” agency principals and producers consider a number of performance factors when choosing which carrier to rely on for most of their business.
The survey, which polled more than 1,500 agencies in all 50 states and asked questions about various aspects of their relationships with the carriers they represent, used a derived importance method to uncover the top performance factors relevant to agents when negotiating new business agreements with carriers.
According to the survey results, agencies favor carriers who perform above average on claims service quality, financial strength and underwriting expertise, but how insurers handle claims was noted as more important than almost any other factor, including agent compensation.
“We weren’t surprised that independent agents prioritize claims service, financial strength and underwriting expertise when choosing carriers,” said Kevin Jenné, lead researcher for this study and research director for
For example, 41% of agency respondents said that their top carrier was “average” or “below average” on agency compensation, but only 13% of them said their go-to carrier was average or less on financial strength or claims service quality.
As the official customer service arm of most insurers, agency principals and producers are responsible for providing excellent claims service, which is largely impacted by their carriers’ ability to process and respond quickly and courteously to their policyholder’s needs. The survey backs this: Of 10 different factors specifically related to claims service quality, agency survey respondents ranked speed of adjuster contact with the policyholders higher than speed of payment. In fact, speed of adjuster contact was rated as “critical” by 70% of respondents, compared with only 35% saying that speed of payment was critical. One carrier was given as an example of superior claims service because of its “fast claims service, a call to insured within the hour.”
According to the survey’s results, agents ranked friendly claims service higher than meeting policyholders’ expectations on claim payment amounts. In fact, 61% of respondents rated friendly service as critical, while only 28% considered providing the expected payment amount as critical.
The survey, which covered more than 100 separate questions, was sponsored by Insurance Journal and conducted by Channel Harvest, a partnership between boutique communications firm
