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The Truth About Being an Insurance Agent

How insurers can create a better experience for independent agents

Mike Chiaramonte
Mike Chiaramonte

Enhancing the Independent Agent Experience

Independent insurance agents are still the preferred option for purchasing insurance today. In 2020, independent agents originated 59% of the Property and Casualty (P&C) premiums. While it may be faster and easier for customers to purchase via the D2C channel, statistics indicate that customers still prefer to work with an independent agent who can recommend the right insurance policy based on their unique needs.

While carriers have heavily invested in direct to consumer (D2C) channels, D2C accounted for a relatively modest 11% of the premiums in 2020, a 2% increase since 2015. 

P&C Gross Premiums written by distribution channel (2015-20)

Source: McKinsey

Broader consumer trends and preferences show that D2C channels are likely to continue growing but alongside general trends it’s clear that consumers still prefer to purchase from independent agents. As of 2020, captive agents lost 4% of the market share since 2015 due to lower customer satisfaction. Carriers have taken note and insurers such as Nationwide are transitioning all formerly captive agents to independent agent channels.

Given this climate, the goal for independent agents is to spend more time on sales and advice to customers and less on servicing, which includes activities such as processing policy changes and bill payments.  Independent agents are adopting software to enhance their efficiency in sales, underwriting and service to better meet customer needs and expectations.  Considering these trends, carriers can alleviate pain points in four major areas.

Top Pain Points Agents have with Insurance Carriers

1. Processing policy questions and changes

Insurance agents are spending a tremendous amount of time waiting on the phone for customer service representatives at insurance carriers, with wait times occasionally reaching 90 minutes even for easy, standard policy changes. While agents understand that carriers are understaffed as a result of the pandemic, this is not sustainable.  During our agent interviews, we consistently heard that chatbots frustrated agents looking to answer policy questions or process policy changes for their customers.  Carriers have the opportunity to enhance their chatbots, as well as expand online functionality for agents to quickly update policies, with automated notifications when policy updates are needed.  This will also reduce call center wait times.

2. More transparency in the underwriting process and access to underwriters

When appealing or reviewing underwriting decisions, agents agreed that they would like more transparency in the process and access to carrier underwriters. During our agent interviews, we learned that agents would appreciate having consistent access to the same underwriters for a given product.  In addition, there’s recognition that underwriters need to pivot to a stronger focus on the customer rather than the traditional transactional nature of their role, now exacerbated due to the increasing digital nature of the underwriting process. Giving agents more direct access to underwriting features would enable them to better understand the policy makeup and pricing, which they could communicate back to the customer.

3. Time spent on servicing

Agents feel like they spend too much of their time on servicing tasks for their customers rather than offering sales and advice. For more mundane tasks like bill payments and automatic policy renewals, agents would be willing to let the carrier take over those tasks.  However, agents are aware of the value of their direct relationship with the customer and want to maintain their place as point of contact for moments that matter and continued customer trust.  One example is the initial intake of claims – agents play a valuable role in determining whether the claim should be processed by the carrier given the policy deductible and long-term premium impact.

4. Lack of customer insights

Agents rely on their Agency Management Software (AMS) as their tool for Customer Relationship Management. For every interaction with the customer, agents refer to their AMS to provide information on the customer. Simple business rules can be set up to trigger agent notifications customer events such as renewals.  For example, one agent we spoke to employs a rule in their AMS to provide an alert to the agent when a customer’s policy increases by more than 12% in a given year. This prompts the agent to take a look at alternative carriers or policy changes.  Given rising costs due to inflation, many policies are increasing by 12% or more so the effectiveness of these simple rule-based approaches are not meeting agent needs. Carriers could take this opportunity to provide more robust customer insight dashboards, incorporating third party data and machine learning algorithms to provide much more robust insights.  Since carriers have an abundance of data in their systems, new and enhanced insights and notifications can easily be deployed and refined based on agent feedback. In our interviews, agents noted they would value technology that scans their existing book to identify and prioritize opportunities for additional policies and enhanced coverage. 

Agency Management Software (AMS) provides a 360° view of a client’s policy information to track prospects and facilitate servicing, including renewals, policy questions and policy changes.

Independent Agent Personas

We interviewed independent agents serving personal and small business line customers to better understand their needs, behaviors, and challenges in their role.   Based on our research findings, we created two agent segments: agents at mid-size agencies (typically around 15,000 total agency personal line customers) and agents at small, community agencies (typically around 3,000 total agency personal line customers). Based on those segments, we created personas. Personas tell us what people do and bring the segments to life. They help us to understand the emotional and behavioral triggers and needs for people in a segment.

Agent Interview Topics
Channel usage
Technology usage
Onboarding (carrier set-up)
Customer acquisition approach
Customer retention / growth plan
Pain points with carriers
Carrier differentiators

Julie (mid-size agency)

Robert (small agency)

Customer Marketing, Sales and Service Journeys for Independent Agents

The agent experience in sales and service can vary significantly depending on their carrier and their agency’s digital capabilities. To highlight these differences and impacts, we created current and future state journeys that highlight the experience from the perspective of the agent. Journeys highlight opportunities to improve the agent (or customer) experience and develop agent-focused strategies that best address the agent’s needs. The journeys below also highlight five opportunities for insurance carriers to improve the agent experience that are described in detail in the next section.

Opportunities for Insurance carriers to improve the agent experience

Insurance carriers have the scale and technology capabilities needed to deliver a great agent experience across marketing, sales and service, and win more business from their agents. We have the following five recommendations for carriers to focus on:

1. Build new, high-tech customer touch points that enable agents to engage customers Nationwide created a platform for agencies to build their own, customized web pages for their agencies.

The platform, Nationwide Express, enables agencies to reach and sell to customers online 24/7. Multiple product quotes are available in as little as 2 minutes.enables agencies to reach and sell to customers online 24/7. Multiple product quotes are available in as little as 2 minutes.

Carriers can develop digital tools that enable agents and customers to engage virtually, including providing video capabilities and enabling the agent and customer to connect with advisory experts from the carrier to help answer questions.

Massachusetts-based Hanover Insurance launched its digital platform Insurago so independent agents can flexibly answer customers’ policy-related questions and offer advice at any time during the buying process.  Insurago provides easy access to real life agent expertise for customers who need guidance or support.

2. Boost salesforce effectiveness with enhanced sales and underwriting tools

American Family Insurance acquired Bold Penguin to make it easier for small businesses to purchase insurance. Bold Penguin upgrades the user experience for businesses purchasing insurance and creates an easy-to-use sales and underwriting tool for agents. Agents use Bold Penguin’s digital exchange to search a range of insurers to match, quote and bind policies for small businesses.  Although American Family Insurance acquired the company, Bold Penguin continues to operate as a subsidiary and separate platform that small businesses can trust to get the best policy and price.

Assured Partners, a US partnership of independent insurance brokers, collaborated with Vertafore to develop the distribution platform Project Fusion, which connects end-insured agents and carriers for real-time commercial policy quoting and binding. By combining advanced analytics and third-party data, insurers can quote and bind a commercial policy in minutes rather than days, decreasing manual inputs by agents up to 90%.

3. Automated Marketing tool

Carriers have built direct to consumer marketing engines and can expand on this offering to build tools for agents to use. Agents have a gold mine of customer data that carriers wish they had access to. If carriers were to extend their marketing capabilities to their agents with robust, easy to use marketing tools, this could be a huge differentiator. Agents would be able to expand their digital marketing capabilities, while carriers would extend their reach to additional customers and gain additional data points on customers. This data would include marketing engagement data that carriers can leverage for deepening existing customer relationships and proactively reaching out to potential customers.

Benefits

  • 4 different pre-built content Libraries for US and Canadian customers to empower marketing efforts
  • Access to more than 1,000 pieces of P&C & benefits-focused content
  • Content includes articles, infographics, deep dives, checklists
  • Allows branding content to their individual businesses and distribute

Usage

Content can be sent as a single client sett up or recurring automated marketing campaign to drip feed information to a select audience, also curation and content customization

Other features of the tool entails

  • Contact list management
  • Sales management
  • Reporting and analytics (agents can track the messages and content audiences are engaging with the most)

Applied Systems (vendor of the popular Epic AMS product) recently launched Applied Marketing Automation, which allows agents to quickly build & track results of marketing email campaigns, delivering relevant, timely content and proposals to clients.  Integration with the Applied Epic AMS makes it the insurance industry’s first natively integrated marketing automation application.

4. Build a platform for agents with an enhanced 360-degree view of customer to deepen the relationship

 Zurich created MyZurich, a dedicated agent portal available on PCs, tablets, and smartphones. The tool’s video capabilities allow customers and sales agents to seamlessly communicate and access multiple layers of information in a personal setting. A particularly popular function is the AI-driven smart-leads generation tool that enables agents to cross-sell proactively & contact potential customers at the right time with the right proposition. Today, agents using MyZurich generate around 4,500 quotes each day and issue about 1,000 policies.

5. Improve an agents ease of doing business (e.g. claim submission) with Digital Platforms

Insurance carriers should invest in digital self-serve platforms and portals for agents. This will increase agent satisfaction and carrier loyalty. The journeys that agents take for sales and service can vary significantly depending on their carrier and their agency capabilities.

 In 2020, RSA (a Canadian insurer) streamlined and simplified the claims reporting process with a new first notification of loss (FNOL) platform. It enables the agents to submit commercial FNOLs digitally on behalf of customers. Accessed via RSA’s new insurance broker website, the platform sets out the information required to get the claim up and running as quickly as possible.

 In 2021, Wawanesa Mutual Insurance Company (California) launched a new digital educational platform designed to support the company’s broker partners. The new Broker Continuing Education platform provides access to training on-demand. The platform will be available on both desktop and mobile devices. With the new program, Wawanesa hopes to further build on its commitment to brokers and empower them with better digital training tools to provide excellent service to their mutual policyholders.

Summary

While there’s currently much attention on carriers improving their D2C channel and capabilities, they should not forget that agents still own the majority of customer relationships and P&C insurance distribution today. Carriers have the opportunity to differentiate themselves and win more market share by providing agents with enhanced digital capabilities and platforms that enable them to efficiently serve their customers and focus more time on sales and advice – a virtuous cycle for carriers.  

Mike Chiaramonte
Mike Chiaramonte
Senior Principal,
Strategy and Consulting

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