The independent agency system is under attack. New competitors fueled by technology and oblivious to the protection needs of the consumer are trying to take over the personal and small-to-medium business market. We see it happening, we’re concerned, but we just aren’t moving quick enough to deal with the threat.
Both independent agents and the carriers we represent need to immediately make the changes necessary to allow us to compete effectively with the competition. As agents, we can no longer operate a traditional 9-to-5 brick and mortar office environment. We must be available when consumers want and we need to maximize technology to offer them immediate access to accurately priced protection.
The need for change lies not only with agents but also with the carriers we represent. Because our business model offers choice and customization, we need our companies to provide an accurate and bindable quote using agency management system information flowing through a comparative rater. Having access to this will put us on equal footing with the digital marketing and direct access companies.
For whatever reason, carriers have been hesitant to abandon their legacy systems and insist on forcing agents to quote coverage and bind coverage in their company-specific system. This creates additional work and slows the process, frustrating the agent and customer, as well as causing increased acquisition costs on agencies.
The belief is that independent agency companies do not want their agents to easily spreadsheet their rates against the other carriers. If that is the case, carriers should rethink that reasoning because it is putting them at a competitive disadvantage in the marketplace. Carriers earn business because of competitive pricing, quality coverage offerings and excellent service and claims handling. Commission income is also important. Making the quoting and binding process slow and inefficient reduces the net compensation an agent receives and affects the decision on where to place business.
Independent agents need to change the way they operate. Being available longer and allowing access to pricing and questions in the evening and on weekends is critical. It will mean staggering work hours and/or contracting with outside firms that can provide those services. Today’s consumer wants access to information and pricing when it is convenient for them. They also want the ability to access you via a mobile device no matter where they are. Being able to price coverage, answer questions and immediately put protection in effect is what they are looking for.
Because independent agents offer choice and customization, access to a licensed person along with a website that provides excellent coverage explanations and advice is a must. Agency staff handling these calls need to be trained to assist consumers in selecting protection that meets their needs and putting it into effect when they want. Allowing consumers to choose coverage on price without a clear understanding of what they are buying and how it will protect them is the opposite of how we operate.
As I said at the beginning of this article, we are under attack. Our way of doing business and the pro-consumer nature of how we offer protection is in jeopardy. Independent agents and the companies they represent need to retool operations to meet this competition head on. We need to educate the consumer about the importance of selecting coverage that adequately protects them at a competitive premium. We also need them to understand and value the advice and support independent agents offer when they have a claim.
To achieve this will take change. Change by agents and their companies. The time for that change is now. If we wait any longer, we allow these new competitors to gain a foothold in the market and very likely hurt consumers in the process. We need to immediately start looking at changing our operations by retraining our staff and retooling our operations to be more effective. We also need to pressure our carriers to provide systems that allow for the fastest and most cost-effective workflow. Anything less will leave us at a serious disadvantage, working twice as hard to write business and doing it at a greatly increased cost.