Redefining ‘Protection’ to Build a More Resilient Future

Most American consumers and business owners share concerns about the year ahead as economists debate whether a soft or hard landing is in store for the U.S. These concerns, driven by sticky inflation and rising interest rates, have led many to tighten their belts in search of relief – including looking for ways to save on their insurance premiums.

According to Nationwide’s recent Agency Forward survey, while agents are busy checking in with clients to ease their fears, they themselves are also worried about the economy and the impact a slowdown could have on their agency. In fact, almost half of agents report declining customer demand over the past six months, and six in 10 anticipate an upcoming recession.

These findings underscore the importance of strong partnerships between carriers and agencies to help navigate potential challenges ahead.

Supporting Economic Conversations

Inflation and rising prices are consumers’ and business owners’ most pressing concerns, prompting nearly half of consumers and a third of business owners to contact their agent to discuss their insurance policies. Another 30% of middle market business owners are turning to their agents to discuss the impacts inflation or supply chain disruptions are having on their rates, an 11-point increase from the fall of 2022.

Many carriers have come to the table with resources to support agents in these conversations, with materials around increasing building costs, labor costs and actions customers can take to mitigate risks due to inflation. However, more than half of agents report being unaware of these offerings, and roughly 70% or more are not taking advantage of carrier-provided economic resources like webinars or economist commentary. As client discussions surrounding these topics take place, carrier partners must be available to help support these conversations on the importance of adequate protection versus shopping by price alone.

Redefining ‘Protection’

The industry has traditionally focused most of its energy on supporting customers when they have a claim. It’s time to broaden the definition of “protection” to emphasize our role in helping customers take proactive steps to prevent a loss from happening in the first place. Proactive risk management is a critical strategy for preventing unforeseen costs, especially when you consider that expense is a concern for half or more business owners and a third of consumers lack savings for emergencies.

While many agents are rightfully recommending risk mitigation services to clients to control costs, nearly 60% of agents report being unfamiliar with carrier-provided risk management resources.Many carriers offer extensive guidance and services for identifying, assessing and mitigating potential risks, including advice for protecting against weather damage or water damage mitigation for businesses.

By tapping into these resources, policyholders can enhance their risk awareness, implement proactive measures, and ultimately reduce the likelihood of claims. This not only helps promote a safer, more secure future, but can lead to cost savings in the form of more manageable insurance premiums.Agents can promote these resources with clients as they can empower customers to make well-informed decisions and better protect their assets. Demonstrating your expertise in this area can also serve as a valuable customer retention tool.

Advocating for change

Finally, as the world grapples with challenges posed by severe weather and natural disasters, the collaboration between agents and carriers can also be used as a force for change.

As we’ve witnessed from recent catastrophes, our communities and businesses are increasingly vulnerable.

This is a pivotal moment for the insurance industry to lean into its central purpose of protection. Working together, agents, carriers and trade associations can advocate at national and local levels for systemic changes, such as enhanced building codes that make homes, businesses and communities more resilient.

Not sure where to start? Organizations such as the Insurance Institute for Business and Home Safety (IBHS.org) have a variety of resources agents can use to help clients mitigate risk.

As we navigate one of the most dynamic insurance markets in history, we have an opportunity to meet the moment with a focus on driving positive change. Together, we can redefine “protection” and build a more resilient future for us all.