Listen to Your Customers, and Win

For decades, the competitors of independent insurance agents have been frustrated.

It seems that every so often our industry is treated to a parade of consulting firms predicting the impending demise of the independent agency distribution system, for their own competitive priorities. These predictions never come true. Instead, the independent agency system not only survives, it continues to thrive.

Just three years ago, one report proclaimed, “The End of an Era for the Local Insurance Agent” and stated that the traditional agent model was “beginning to unravel.” PIA refuted these assertions and noted that the report seemed to present a predetermined outcome, much like an opinion article.

PIA and our agency-company council, The PIA Partnership, decided that what was needed was objective research into the current buying preferences of our customers. We firmly believe that the main reason independent agents continue to thrive is that they provide a great customer experience.

PIA conducted two nationwide studies involving both surveys and focus groups of insurance customers, to ascertain buying preferences. One looked at commercial lines and the Internet; the other examined buying preferences regarding personal lines. Both found that consumers overwhelmingly preferred doing business with local agents.

Our commercial lines survey results contained a wake-up call for agents. Small business owners, while expressing an overwhelming preference for doing business with local agents, have expectations that their agents will offer online interaction concerning their accounts such as premium payment or requests for certificates of insurance. And more, that the agency will have a fully credible online presence including a modern website and engaging social media profiles. In short, customers want digitally engaged agents as experts who are backed by the efficiency of the Internet.

The value that independent insurance agents provide to their customers far surpasses what direct writers can ever hope to offer. However, one thing that some direct writers do that independent agents do not is bind policies online.

There has been ongoing, informal discussion among agents, companies, vendors and user groups about the inability of a consumer to bind a policy on an agent’s website – and whether or not that represents a lost opportunity. Many agents have a comparative rater that offers a quote, but should a consumer like the quote, they can’t bind the policy unless the agency is open for business.

Just because something is technically feasible doesn’t mean that it’s necessarily a good idea to do it. But by the same token, it might be. What’s needed is a discussion. That’s why PIA recently initiated an industry conversation among all stakeholder groups, with agents at the table and at the center. We held an industry meeting in January 2016 in New York, at the headquarters of ACORD, to discuss these issues as an industry.

We discussed the upside, downside, barriers, and technology components of a “buy button” for independent agents. We also discussed whether it is possible to structure such functionality in a way to ensure that it is complementary to the value proposition of independent agents, and does not undermine it.

The customer is always right. This is such a simple concept, but it often gets lost. Only by listening to your customers can you find out what they want. If we listen and then deliver accordingly, we will thrive. Our customers win, too – and so do our carriers.