Carriers, Producers Fail To Communicate
“What we have here is a failure to communicate.” That famous quip–delivered by a cruel prison warden to sassy convict Paul Newman in “Cool Hand Luke”–captures perhaps the most important finding in the “Producer Satisfaction Survey” conducted by Deloitte, in partnership with National Underwriter.
Insurers love to boast about the “partnership” they enjoy with their independent agents and brokers, but the truth is that while almost all carriers talk the talk, apparently only a select few truly walk the walk.
That’s the biggest conclusion I drew from the survey, which forms the basis of this week’s cover story. (You may check out the main survey story at http://bit.ly/3FqjhO, and two related articles at http://bit.ly/4Ar6d7 and http://bit.ly/1DhbSI.)
The good news is that the majority of producers appear to be quite satisfied overall with their carriers in a number of key attributes that help agents and brokers determine which insurers to represent.
Frankly, I had expected more griping–especially in an anonymous survey of 1,596 agents and brokers of all shapes and sizes. Producers often complain to me privately about carriers failing to stand behind them through good markets and bad, not offering enough tech support, and never paying them enough for all the grunt work they do to get and keep clients on the books.
But before we celebrate, the fact is the vast majority surveyed by Deloitte feel left out of the loop on key carrier decisions and activities affecting their working lives—including biggies like product development, marketing and claims.
Of course, it’s no surprise that the bigger the brokerage, the more likely the respondent was to report being sought out for feedback. With most insurers getting 80 percent of their business from 20 percent of their agents and brokers, one could forgive a carrier for connecting more often with their most important distributors.
However, that argument loses some of its power when you notice in the survey that even among those at the biggest firms, fewer than one-quarter of producers said they were “often” solicited for input on marketing and product development, while only 18 percent were queried on tech issues.
The numbers were far lower among smaller agencies, even though the business produced by such firms can quickly add up.
That doesn’t sound like much of a “partnership” to me.
This situation can be easily corrected. Indeed, those carriers that take their partnerships with producers seriously should be able to capitalize on the failure of their competitors in this regard by establishing better lines of communication as part of their standard operating procedure.
Carriers that are more proactive and collaborative by including producers in strategic planning will have an easier time keeping their partnerships intact, as the Deloitte survey revealed that the more often agents and brokers are solicited for input, the more satisfied they are.
Those carriers that fail to seize this opportunity, or scoff at the notion that producers deserve a seat at their table, might find themselves on the outside looking in.
You see, the Deloitte survey also found that shelf space will be at a premium pretty soon, with 36.9 percent indicating they would be consolidating their books of business among fewer insurers. Another 42.8 percent expect to add carriers.
Either way, insurers that earn a reputation for making communication with their partners a two-way street will likely have a better chance of keeping their producers, as well as attracting new ones in this very competitive market.
So, what are you waiting for?
Entries (RSS)
Sam: I have not yet had a chance to read the lead article, but have read your commentary.
I took the survey when it was offered to me…as did many others. My main comment is that it was hardly scientific.
There was no control over who took the survey, likewise there was no control over the responsibility level of the participants.
Even in the same agency/brokerage ,different participants would have offered different perspectives. The successful producer will view one carrier differently than the producer who is just starting out. Likewise the account managers working on those same producers accounts will likely have different perspectives from the producers.
Therefore, all that can be realized from the survey is that among the participants their opinions were the following. And then list the results. We can not read between the lines and make judgements as to the relationships between the participants in our industry.
Frankly, I expect better from a national trade journal. I do realize that you are a columnist and not a journalist. You are expressing your own personal point of view.
Have to run out to an appointment, when I get back I will read the article.
SAM RESPONDS:
Actually, Michael, when you read the third story in the trio, you’ll see that our survey base was a very experienced lot. Nearly half had more than 30 years in the industry, and another third have been in the game between 15 and 30 years.
They were also senior level producers. Two-thirds were either the CEO, president or at least a principal of their firm. We also had a good cross-section in terms of size of firm. So we believe the results quite legitimately represented the top players in the agency and brokerage business.
Sam, I think Michael’s quibble was more that NU was basing this all on an online survey with very little mechanism to verify the information the participants provided about their positions, agency size, etc., as opposed to say an in-person focus group where you have the ability to authenticate that information.
That said, I doubt very much that those who take an online survey from NU are lying about any of the information they provided, and therefore the results of the survey are probably pretty reflective of the attitudes of the broader agent/broker community represented by those participants.
As always, keep up the good work.
Seems to me that there are three kinds of carrier/agency relationships: 1. really poor, wish/want/should to get out, 2. OK/pretty much indifferent to ‘very satisfied’, and 3. ‘knock your socks off’ great.
If the carrier is striving to become ‘knock your socks of great’, my perspective is that they need a better read on the feedback from agencies than ‘how can we do better?’ or ‘how satisfied are you with us?’ and the multitude of other questions that are so often asked and that many carriers often already know the answer to.
A better question, which is actually referred to as “The Ultimate Question” might be: “Agent: If you had a non-competitor family member or friend in the agency business, what’s the likelihood that you would recommend company XYZ to them”?
Use a scale of 0-10 (zero being the worst, 10 being the best) and calculating what’s called the company’s Net Promoter Score by taking the % of agencies that rated the company a 9 or 10 (these are called ‘promoters’) and subtracting the % of agencies that rated the company a 0 to 7 (which are called ‘detractors) and you get what’s called your Net Promoter Score or NPS. For more info on the score just visit http://www.netpromoter.com.
It’s important to ask that question with room for lots of comments so that they can explain their rating. The carrier will learn much more from the one question and all the comments than other more typical surveys.
My experience with NPS is that themes arise that other surveys don’t bring out. And, importantly, the ‘would you recommend’ question is one that carrier staff can relate to in terms of proving itself. Employees are sick of hearing about ‘raising the bar’. The would you recommend question gives them a goal that tells a story.
I commend NU and Deloitte for the exercise and effort, and I am sure that the findings are useful to many, maybe even all.
But if a carrier really wants to get at the issues and winning the support of employees to overcome them and innovate, they should start working toward creating/earning ‘promoters’ by turning policyholders into advocates who would enthusiastically refer family, friends and colleagues to their company for business.
If the carrier creates customer advocacy with policyholders – and can prove it – what agency in their right mind wouldn’t want to funnel more business their way?
Obviously, communication between the carrier and agency has to be done in a way that ultimately results in agency and policyholder advocacy. But improvement can be a two-way street.
A question agencies might ask carrier contacts is : “Hey carrier, based on what you know, what’s the likelihood that you would recommend us to family members, friends or colleagues to us”? Now that might be REALLY revealing!
Okay, off MY soapbox. Good luck everyone.
Sam, your view was fantastic, as was your content. Clearly, many insurers, especially in Personal Lines, give little regard to their agents thoughts or opinions as these insurers develop their strategies.
Too many trade publications are afraid to have an honest discussion regarding the fact that many agents are increasingly feeling alienated by their insurance company “partners.”
I understand that most of the advertising revenue that the trades receive is from carriers, and that puts publications such as yours in a difficult position when attempting to publish content that may offer up some constructive criticism of insurers. Congratulations to NU for for doing so.
My Agency/MGA operation works with thousands of independent agents for Specialty Personal Lines placements.
I am increasingly hearing from agents feeling “shortchanged” by their carrier partners’ decision-making. Again, I speak from the perspective of Personal Lines here…..it may be different on the Commercial side.
Thanks again.
It was the warden that said, “What we have here is a failure to communicate.” A movie classic.
SAM RESPONDS:
Indeed, you are correct, sir. But as I recall, Luke repeated the phrase back, mockingly, later in the movie…..