How satisfied are insurance agents with their carriers?

How satisfied are insurance agents with their carriers? | Insurance Business America

Insurance News

How satisfied are insurance agents with their carriers?

“Rising premiums are the ultimate disruptor”

Insurance News

By
Ryan Smith

Although independent agents are more satisfied than ever with their carrier partners, rising premium costs may have put these partnerships on thin ice, according to a new study from J.D. Power.

According to the J.D. Power 2023 U.S. Independent Agent Satisfaction Study, overall agent satisfaction with both personal and commercial lines insurers has hit a record high. The study, developed in collaboration with the Independent Insurance Agents & Brokers of America, evaluates the role of independent agents in property-casualty insurance distribution, as well as agents’ business outlook and satisfaction with US insurers.

Satisfaction with personal lines insurers clocked a 17-point increase year over year on a 1,000-point scale, the report found. Commercial lines recorded a six-point jump.

Despite these improvements, more agents have been shopping policies ahead of their clients renewals, J.D. Power said. More agents are also willing to change policies for a lower price to retain clients, even if the agents are satisfied with their current carrier.

“Carriers are doing a great job of providing quality service to agents and it creates a huge competitive advantage,” said Stephen Crewdson, senior director of insurance business at J.D. Power. “Agents are more willing to place business with a carrier when they are more satisfied with their experience. However, the uptick in agents shopping their clients’ policies shows that rising premiums are the ultimate disruptor, threatening to upend even a strong existing relationship. That puts the onus on carriers to find ways to incentivize agents to stay by offering an experience that can justify these cost hikes.”

Key findings of the study include:

Agent satisfaction hits all-time high: Overall satisfaction among personal lines agents is at 774, up 17 points from last year. Overall satisfaction among personal lines agents is 762, a six-point hike from 2022
Rising prices cause agents to shop policies: More agents are shopping their clients’ policies with other carriers to look for better prices, J.D. Power reported. More than half of both personal lines (57%) and commercial lines (52%) agents said they were shopping more for clients now than they were two years ago.
Service trumps incentives: When agents were asked why they placed business with a specific insurer, ease of quoting (18% for personal and 17% for commercial) and risk appetite aligned with agency (13% for personal and 15% for commercial) were the most common responses. Underwriting was more important for commercial lines than personal lines, J.D. Power found. However, commission and incentives (6% for personal and 5% for commercial) were among the least important factors, according to the study.
Large alliances increase satisfaction – to a point: Many agents are part of agency network alliances that give them access to more carriers and better buying access. Up to a point, the larger the alliance, the more satisfied its members were with insurers, J.D. Power found. However, that held true only to a point; the largest agency alliances – those with $50 million or more in revenue – were actually the least satisfied of all alliance groups, and the members were less satisfied than agents who weren’t in an alliance for commercial lines.

Read next: Revealed – record lows in customer satisfaction with auto insurance providers

Rankings

Auto-Owners Insurance ranked highest among personal lines insurers, with a satisfaction score of 839. It was followed by Erie Insurance (829) and Progressive (806).

Auto-Owners Insurance also ranked highest among commercial lines insurers with a score of 847 – the third consecutive year it has taken the top spot. It was followed by Cincinnati Insurance (809) and The Hartford (792).

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