FEATURE / PRODUCERS ON CARRIERS
“It seems as if many of our standard markets are welcoming any distribution channel ... This is a slap in the face to those of us who have spent our entire career supporting them” As a local leader of the Insurance Office of America in Aliso Viejo, Calif., Alicia Igram is dismayed by what she sees as lack of discrimination on behalf of carriers, even when some distribution channels historically leave a lot to be desired. “It seems as if many of our standard markets are welcoming any distribution channel,” Igram says. “[They’re] even working with payroll companies that are notorious for telling employers that most of the employees should be classified as 8810 Clerical. “This is a slap in the face to those of us who have spent our career supporting them.” Even carriers who work solely with independent agents still garnered distrust from producers. Several respondents expressed confidence that carriers would drop independent agents as soon as “selling direct” became economically feasible. Other respondents were less fearful. McClain admitted to being comfortable with multiple distribution channels, “as long as there isn’t different pricing in each channel.”
SIZE MATTERS…SOMEWHAT While the core priorities of producers remained the same across agencies of all policy volumes, the survey did reveal a few interesting divisions in addition to the comparative importance of commitment to brokers. Agencies reporting less than $10 million in annual policy volume were far less likely to give weight to carrier reputation and financial stability, for example. Mid-sized agencies of between $1 million and $10 million in policy volume rated it as
the third-least important factor in choosing a carrier (7.78), while reputation and financial stability ranked dead last with small agencies of less than $1 million (6.72). Similarly, underwriting expertise was rated less important to agencies bringing in more than $10 million in policy volume (7.66 compared to 8.00 for mid-sized agencies and 8.02 for small agencies). Many producers and owners of these larger agencies commented that they prefer to keep underwriting either in-house or confined to a managing general agent. Larger agencies did place more importance on a carrier’s product range, however, as compared to their smaller counterparts. These respondents rated “range of products” as their fifth-most important priority, as opposed to low seventh- and eighth-place slots for small and mid-sized agencies, respectively.
CARRIERS SHOULD SPECIALIZE, TOO The shifting sands of consumer sentiment have already altered many aspects of the insurance industry, and producers noted in comments that it’s time carriers embraced some of these changes— namely, specialization. The call to find a niche has echoed among producers and wholesalers for years; now, producers want carriers to adapt as well. In answering questions on the range of products offered by carriers, many producers noted that it isn’t quantity but quality that counts. Product range ranked as the third-least important quality of an insurance carrier overall, and it didn’t break into the top four priorities for any sized group. Producers carried a simple message throughout: Better to have an arsenal of full coverage in a few areas than incomplete offerings for all markets. “Just like we can’t be all things to all consumers, we don’t expect our carriers to be able to offer every product,” says McClain. “The value of an independent agent is that we can seek out other partners if needed.” It may eventually make the difference between carriers that win producer business and those who fail.
14 | SEPTEMBER/OCTOBER 2014
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