Attracting new agents is a growing challenge for insurance carriers, as discussed in my last post. Maintaining a motivated group of veteran agents and ensuring they write your products versus other carriers’ products is equally important. As carriers refine their product and service offering, they also should differentiate themselves in other factors to drive competitive advantage with agents.
Agents want more than good prices and strong service
In March, we surveyed 170 insurance professionals to assess the drivers of the agent-carrier relationship. Not surprisingly, agents and carriers rated the carriers’ core product and service offering most frequently as a top-three factor in driving agency success. This makes sense, as agent success is tied to the success of their customers. We also observed, however, that agents were more loyal to carriers that stood out with factors other than the core product and service offering.
We found that "best" carriers always had a core product and service offering that was rated at least "at par" to the agent’s industry rating (the "price of admission"). However, "best" carriers were rated well above the industry in at least one of three factors that spanned the following categories:
1. Attracting and engaging new customers through:
- Marketing campaigns
- Presence on the Internet and social media
2. Expanding agency capacity to deliver the offering to customers through:
- Hiring and developing talent
- Freeing up agents’ capacity
3. Strengthening agency performance through:
- Incentive plans
- Clear incentive plan communication
- Contests and recognition programs
- Performance tracking
- Personal relationships
A big benefit to be had
We observed that carriers who excelled relative to the industry in factors beyond the core product and service offering earned greater than two times an agent’s expected share of business. We are not suggesting that carriers have to lead the industry in all factors, but recent trends and this evidence indicate that carriers must stand out in at least a few of the above factors to drive high market share from agents.
We believe that organizing differentiating features around the three categories above could be a starting point, although all carriers should be prepared to perform acceptably in all areas. Don’t know where to begin? A good way to start would be to conduct a self-assessment including a cross-section of personnel from headquarters and the field. From there, you can identify and prioritize strengths and gaps.