There’s a small green reptile that seems to have become ubiquitous in all of our lives. It is constantly popping up on our television screens and speaking to us on the radio. Amazing as it may seem, a cartoon character may be considered by some to be an expert source of information about insurance.
No, seriously. It is possible that an animated spokesperson for a direct writer could come to represent insurance in the minds of some people. Of course, that’s probably one of the goals of spending gazillions of dollars on advertising. What is troubling is the perception that is also being created that insurance is a commodity, a do-it-yourself transaction driven primarily by price. Except that’s not how insurance consumers see it.
One of the more enjoyable aspects of objective research is that it can very effectively debunk common misconceptions that become conventional wisdom due to large expenditures on advertising.
The National Association of Professional Insurance Agents, together with our carrier partners who participate in The Partnership, conducted a national survey of personal lines insurance customers. This survey represents not only independent agency customers, but also those purchasing through online, direct and captive channels as well. The complete survey results are quite comprehensive with more than 140,000 data points.
Our research clearly shows that independent professional insurance agents have what insurance customers are looking for: expert advice and counseling, personalized attention and interaction, the ability to offer comprehensive protection to meet individual needs and excellent “relationship based” customer service. Significantly, we discovered that customers care about coverage. If the price of two policies is nearly the same, they would most likely choose one over the other based on better coverage or a lower deductible.
Our research also found that 69 percent of customers want to be contacted when their insurance agent or company has a suggestion for them to add coverage they may be missing or increase coverage when they may be underinsured; 81 percent want to be contacted when their insurance agent or company has a suggestion for how they could save money on their insurance; and 73 percent want to hear from their current insurance provider more often than just at renewal.
Shortly after The Partnership released its findings, Ernst & Young released findings from its survey of 24,000 insurance customers in 23 countries, one of the largest surveys of consumer attitudes about insurance ever conducted. Their results mirrored our results. Among Ernst & Young’s findings: Consumers do not want to do all their insurance shopping online, they care about more than just price, and good claims service is something consumers expect, rather than an extra bonus that will help a company’s retention rate.
E&Y noted that “received wisdom” is that in the future online will be the dominant channel for both research and transactions, but that “Customers clearly voiced a desire for both improved online access and continual personal contact when it matters.”
What Does All This Mean?
It means that Main Street independent insurance agents are the future of our industry. Main Street agents are uniquely positioned to deliver what insurance customers demand. Many of the areas in which independent agents provide added value are the same areas valued by a vast majority of customers.
The bottom line: customers want what Main Street agents have to offer. Attempts to turn insurance into a commodity will continue to fall short because insurance customers care about much more than just price. Above all, they value the relationship they have with agents, and the value this brings to them. No amount of advertising and no amount of wishing that insurance could be treated as a commodity will make it so.
Our findings run counter to conventional wisdom that “bigger is better,” that insurance buying is overwhelmingly price-driven and that customers are no longer interested in personal relationships with their insurance providers. To those who are heavily invested in business models that customers actually do not prefer, facts can be inconvenient things.
The Partnership was originally established as the Company Council of Executive Officers (CCEO) in 1996. Through its work with The Partnership, PIA National and insurance company participants focus on identifying areas of effort that serve to enhance the success of professional independent insurance agents.
Current Partnership companies include: Encompass; Erie Insurance; Harleysville Insurance; Liberty Mutual Agency Corporation; MetLife Auto & Home; Motorists Insurance Group; Progressive Casualty Insurance Company; Selective Insurance Group; State Auto Group; The Central Insurance Companies; The Hartford; and Travelers. PIA members and agencies representing Partnership companies can access the new Web site at: AgencyTouchPoints.com.
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