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Agents Send More Business to Insurers with Better Tech, Celent Finds

Insurers seeking to drive growth need to make it easier for agents to place business, with 76% of agents saying they would send more business to insurers if insurers improved their technology and made it easier, according to a new study by Celent.

Celent, a global research and advisory firm focused on technology for financial institutions, released a study of insurance agents and what drives them to place business with insurers. The report presents the results of an online survey of 225 independent insurance agents conducted in May 2021. The respondent sample was fairly evenly split between those who specialize in property casualty, those who specialize in life and benefits, and those who focus on both.

“Many forces are impacting the independent agency channel, causing agents to step back and reassess their business models and investments. Just as insurers continue to invest in innovation and digital transformation to deal with the changing external forces, agents are impacted by these very same forces,” said Karlyn Carnahan, head of Celent’s North American property casualty practice and author of the report. “We see a growing difference in need and attitude based on generational shifts. As the agency community continues to retire, new capabilities will be needed, both to enable a new generation that needs training and to appeal to a new generation of executives.”

Celent surveyed a group of agents to understand those areas most likely to make an insurer the agents’ top choice. Some of the key findings of the Optimizing the Independent Agency Experience report: include:

  • To drive growth, insurers need to make it easy for agents to place business. Seventy-six percent of agents said they would send more business to insurers if insurers improved their technology and made it easier.
  • Agents select their insurer of choice by the insurer’s alignment to key capabilities that support them in promptly selling business. Not surprisingly, price was stated as the most important criterion, followed by ease of doing business and the relationship with the insurer. But although agents said price was the No. 1 determinant of where to place business, the data show that relationship and ease of doing business beat price. Agents do not simply place business where the best price is. They place business where it is easy.
  • Technology is increasingly important to agents: The threat of direct-to-consumer models is driving agents to place higher value on technology than ever before. Gen X and millennial principals are much more likely to agree their agencies are on top of technology, with 81% agreeing compared to 68% of baby boomer principals. Those who actually use the technology daily, the CSRs and account executives, are least likely to agree that the agency is on top of technology.
  • When asked whether they preferred to work through an insurer’s portal or through their own agency management system, the majority of those responding, 64%, preferred working directly through the portal.
  • Eighty-four percent stated the existence of a service center was a very important reason they choose the insurer. Sixty-three percent said they prefer to use an insurer’s service center instead of servicing the business themselves.
  • Eighty percent agree that it is important to provide policyholders with self-service tools. Those who do not agree worry about disintermediation. Those who agree still have some reservations. Some are worried that the insured will shop for coverage without notifying the agent. Others are concerned about errors and omissions exposure.

Agent Business Concerns

Source: Celent Survey, May 2021

Looking ahead, the industry is likely to continue to experience increasing channel complexity and increasing regulation, which means there are opportunities both to improve the agent experience and to reduce costs along the way.

Methodology

This report presents the results of an online survey of 225 independent insurance agents conducted in May 2021. We sourced our leads through an independent third party sampling company with its own panel of respondents. The survey responses reflected varying sizes of agencies, and participation was sought so that results would be representative across different roles, sizes of agencies, lines of business (LOBs) written, and age groups.

About Celent

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally experienced analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh McLennan Companies. [NYSE: MMC]. For more information, visit www.celent.com. Follow Celent on Twitter @Celent_Research.

 


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