What should independent agents be doing to prepare now for the changing landscape of the imminent future?
Safeco Insurance recently surveyed 600 independent agents around the country to learn how they are adapting to current changes, what they think will be important in the future and what they are doing today to prepare for tomorrow. The survey led to the creation of a dedicated website, AgentfortheFuture.com, which hosts a downloadable report and features insights and ideas intended to help all independent agents deal with marketplace changes.
The report notes that much has been written about independent insurance agents fending off fierce competition from direct-to-consumer carriers and captive agents. Despite intense pressure from other channels, independent agents have maintained market share and continue to leverage their unique ability to provide their customers with ease, choice and advice.
Given the pressure of competing in a crowded marketplace, it could be tempting for independent agents to focus on the daily challenges of serving and retaining existing customers, as well as trying to find time to grow their business. But what about the future?
Agents target 2020
It’s often said that we’ll see more change in the insurance industry in the next five years than we saw in the last 25. Therefore, with its study Safeco decided to focus on the foreseeable future and identify specific steps agents can take to be prepared for 2020, which is less than three years away. The “Agent for the Future” survey focused on areas such as:
• How agent roles and business priorities are evolving
• The impact of customer habits and expectations on agency operations
• The effect of trends on employee as well as new customer recruitment and retention
• How technology is altering both day-to-day business and long-term growth potential
Big shifts in priorities
Survey results indicate a noteworthy shift happening among agents regarding what they would like to prioritize from a business and customer service perspective. Recognizing that societal and technological shifts are impacting how customers want to engage with an insurance provider, many independent agents are addressing new competitive realities, upgrading service operations, and transitioning role responsibilities.
Agents are no longer just discussing improvements needed to better serve clients, grow premium volumes and support employee satisfaction. Increasingly more are actively making, or planning, for these enhancements. The nation’s independent agents recognize that to ensure long-term agency growth, it can no longer be business as usual.
America’s independent agents are poised to address several key market shifts and are taking important steps to lay the foundation for future growth. Currently, the survey shows independent agencies are placing particular emphasis on:
• Evolving the roles and responsibilities of agents
• Utilizing new technologies to address customer needs
• Growing their infrastructure
According to the 2016 Agency Universe Study, 75% of agencies have under $500,000 in revenue and between 3-4 employees. Therefore, these advances, combined with agent predictions for the future, may signal an exciting shift in momentum for the independent agent channel which will enable agents to grow their business and provide even greater levels of advice, service and support to their customers.
Here are some of the insights uncovered in the Agent for the Future survey:
• The roles of producer and CSR are merging
Recognizing that independent agents often wear many hats, Safeco was curious about how the roles of CSRs and producers might be evolving. Those surveyed said that they see the responsibilities of producers and CSRs merging into an account executive or account manager role.
Some of the agents surveyed believe this may be in part because technology has taken on some of the mundane agency tasks, freeing both CSRs and producers. As one agent noted, “CSRs are more apt to quote and issue now, rather than just service. Automation has helped with that change.”
Agents reported that 37% of CSRs write a lot of new business and that 43% of producers provide a lot of service to their customers.
These blended roles can benefit customer service. One IA surveyed said it best, “I encourage my CSR to take the phone call from start to finish. The CSR needs to know how to sell multiple lines of business and be able to answer questions or find answers without passing the client from person to person within the agency.”
In addition, when CSRs are helping a customer, they are in a prime position to look for opportunities to cross-sell additional products and services.
• Comfort with evolving customer needs
Contrary to the popular stereotype that independent agents are wary of change, Safeco’s research reveals that independents are adapting to some of the changing needs of customers by offering the ability to e-sign documents or providing gap coverage for ridesharing.
This will become increasingly important since 30% of agents expect that the sharing economy will have a major effect by 2020.
However, there is room for improvement. While 40% of IAs are comfortable with online account management for their customers, 38% of IAs are still only somewhat comfortable with the idea. Even more concerning, 14% are not comfortable with online account management and 8% don’t want to offer it at all.
Understandably, some agents expressed appropriate concerns about customers making unwise changes to their coverage without professional guidance. However, customers can take care of many routine activities online such as checking policy details, printing ID cards or paying their bills.
More key findings
• More than half of agents surveyed said their agencies have hired producers, service and support staff in the past 2 years, and more than half (58%) of the new jobs were filled by Millennials.
• 31% of agents surveyed anticipate that CSRs will spend even more time writing new business by 2020.
• New market segments were named a vital part of an agency’s five-year growth plan, therefore it makes sense that the Hispanic market – making up 17% of the U.S. population – represents a compelling opportunity. Yet, only 14% of independent agents surveyed believe the growth of the Hispanic market could have a major impact on their business.
• Today, only 25% of those surveyed off non-English-speaking options.
Thoughts or comments? Please visit this thread: Independent agents surveyed about future
Findings in this research are based on an online survey among 600 independent agents conducted in April and May 2017 throughout the U.S. Respondents for this survey were selected from among those who have volunteered to participate in online surveys. Because the sample is based on those who initially self-selected for participation in the panel rather than a probability sample, no estimates of sampling error can be calculated.
For a complete report on the study, visit AgentfortheFuture.com.