Insurance Agent Discontent With Carrier Technology Presents an Opportunity for Insurance Companies

Insurers are falling short when it comes to delivering the capabilities that agents demand, according to New York-based Deloitte. In addition, other insurance sectors besides life similarly fall short, industry observers say. Regardless, producer dissatisfaction constitutes an opportunity for carriers to differentiate themselves from their competitors as agents look to drop or add appointments.

In its "Voice of the Producer" life insurance and annuity producer survey, which was published in November 2011, Deloitte reports that sales support, speed of underwriting and policy issue, and carrier brand are the top factors influencing a producer's decision to place business with a specific carrier. Approximately two-thirds of the roughly 650 U.S. life and annuity producers surveyed by the research firm said they expect to change carriers within the next 12 months. Twenty-nine percent said they plan to add carriers and one-third said they expect both to add and to drop carriers (see chart, next page).

"On issues they believe are most important to sales, 40 percent of producers are not satisfied with the support they currently receive," comments Rebecca Amoroso, vice chairman, Deloitte, and insurance leader. "However, with more than 80 percent of their total compensation coming from two favored carriers, there is room for improved producer loyalty and sales through better support."

Carriers can do a better job leveraging agent relationships as a platform for growth by developing a more granular understanding of producers and segmenting them according to their needs, adds Rick Berry, director of Deloitte Consulting's financial services/insurance industry group. "There are producers that value leads and there are those that don't," Berry notes. "Carriers can do a better job by delivering leads to those who want them and not wasting time with those whose preference is for an accelerated new-business process."

To Each Producer, His Own

The Deloitte survey examines four broad types of producers, each of which suggests distinct initiatives for carriers seeking to build loyalty and expand market share with such producers: "speed merchants" value speed of underwriting and issuing new policies; "consummate salesmen" value high-quality sales support; "volume sellers" value the quality and volume of leads provided by carriers; and "brand aficionados" value carriers with strong brands.

The list of agent segments is not meant to be exhaustive, Berry emphasizes, adding that carriers can identify more-refined profiles. The importance of the research, he says, is that carriers are actively looking for criteria to help them decide with whom to do business.

"There is 'jump ball' potential here," Berry says. "The carrier that does a better job of aligning with producers has a better shot at replacing another carrier, or moving up in the rank of carriers where producers place business."

Producers in the P&C space are similarly living with gaps between what they want and what carriers supply, according to Madhu Rao Nandagiri, senior manager of New York-based Capgemini's insurance practice. "Agents are seeking greater ease of doing business, meaning tools and automated processes to make them more efficient," Nandagiri asserts. "That includes things such as single sign-on and not having to key in data multiple times."

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Agents also are looking for carriers to help them support growth, adds Nandagiri. "Although agents drive new business growth, carriers have a great deal of information on insureds," he observes. "The challenge is to link the strengths of both parties so that carriers can provide leads to agents."

On the commercial business side, agents are seeking to leverage expertise across a given carrier more efficiently, Nandagiri says. "It's a matter of simplifying the agent's interaction with the carrier for a given client ... within the different lines of business," he explains. "Carriers need to enforce a process that enables collaboration and drives greater agent productivity."

On the personal lines side, carriers need to understand that the personal dimension of agents' relationships with the carriers' underwriters no longer is as important as service, according to a Novarica report published in October 2011 (see related article, page 14). "We tend to think of the underwriting relationship as being about personal chemistry, but that relationship is heavily influenced by responsiveness to requests, and that is heavily impacted by technology," says Karlyn Carnahan, principal in New York-based Novarica's insurance practice and co-author of the report. "In choosing their No. 1 carrier, the underwriter relationship is actually the lowest-rated factor -- speed and convenience are highest."

The Novarica study, which surveyed roughly 100 personal lines agents, also found that producers saw very little difference in product offerings among their top three preferred carriers. The lesson is, says Carnahan, "If you're trying to differentiate on product characteristics, your front-line agents are not likely to sell on those differences."

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio