Independent agents are the polyglots of the insurance world. Fluent in many carrier processes and systems, they interpret each of the unique policies and procedures for their clients. To become the experts they are, agents go through different onboarding, licensing, and compliance practices with each carrier partner. Unfortunately, these areas are often sources of frustration in their carrier relationships.
Our new eBook “Independent agents on improving carrier partnerships” explored—among other insights from agents—how these factors impact experiences with insurance carriers and the value that agents placed on improving these processes. We also asked them about some additional factors they consider, like compensation, when selecting carrier partners.
Agents remain frustrated with carrier processes
We surveyed nearly 1,300 independent agency professionals, and according to respondents, improving independent agent experience requires easier, more efficient onboarding, licensing, and compliance processes. Surprisingly, only 33% of agents felt their primary carrier partners provide great service in these areas. That leaves most agency partners dissatisfied with the state of several key aspects of their professional relationships.
“On the administrative side, carrier online onboarding is absolutely the worst experience in the insurance world. It is difficult, and it is different for every single carrier.”
As technology becomes more widespread in the industry, standards are changing. Carriers need to make it easier for agents to check renewal status, connect with a clear point of contact for licensing, and learn their unique tools and product offerings. In fact, being able to easily view authorization, appointment, and renewal status was considered a must-have function for 64% of respondents. For newer agents, these expectations are even higher, with 79% of first year agents deeming it a must-have feature.
By investing in more efficient insurance producer onboarding solutions, carriers can improve agent experience and reduce the current state of frustration that many agencies endure. A more positive onboarding, licensing, and compliance experience can also bolster brand reputation and attract new partnership opportunities.
Clear and competitive compensation wins agents
As expected, money matters to agents when deciding the carriers with which they want to partner. Frustrating processes aside, getting more money for the same work is a motivating factor to do business—and 64% of respondents considered competitive commissions a must-have when choosing carriers.
Surprisingly though, this was not the top factor for agents. Clear and accurate compensation statements narrowly edged out competitive commissions, with 67% of respondents deeming it a must-have. Ultimately, the two closely related factors strongly influence which carriers independent agency professionals choose to work with.
Given the weight that agents place on competitive commissions and clear compensation statements, it’s not surprising that commission cuts have a negative impact on agent-carrier relationships and even threaten to jeopardize the relationship entirely.
“Compensation is what keeps agencies open. It is hard to understand when carriers cut agent compensation, but then read about senior management at carriers receiving increases in compensation.”
At the very least, carriers should make efforts to communicate any necessary commission cuts and the reasoning behind them with their agency partners. By being transparent, carriers can demonstrate sincerity in maintaining a positive relationship with independent agents, even amid a less rewarding change.
And while commissions may change, the ease with which agents can monitor their compensation is an area carriers can focus on improving. Offering online tools for better producer compensation management was another important factor for respondents, with 95% rating it as a must-have or nice-to-have feature.
Takeaway: Invest in improving agent experience
When it comes to selecting their carrier partners, agents consider a multitude of factors, from technological features that improve workflows to compensation statements and clear communication. While there are a lot of expectations, and many are changing as technology becomes more commonplace in the industry, several key opportunities have been identified where carriers can try to improve agent experience.
- Make onboarding and compliance processes easier, and increase visibility on authorization, appointment, and renewal status.
- Maintain a competitive compensation structure and communicate changes to that structure whenever they occur.
- Offer online tools for agents to monitor or manage their compensation with ease.
Agents devote time and resources to learn the language of all their carrier partners, so that they can better relay information to policy holders and assist in every scenario. If carriers demonstrate a similar level of investment, they can improve agent experience and win more business from the independent agent distribution channel.