CSI Personal Lines Report 2012

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2012 COMPANY SATISFACTION INDEX SURVEY

RESULTS An exclusive member benefit for benchmarking carrier relationships.

C O M PA N Y S AT I S FA C T I O N I N D E X

2012 CSI RESULTS

2012

Summary The Insurance Agents & Brokers (IA&B) conducted its annual survey of agency members in Delaware, Maryland and Pennsylvania to determine their satisfaction level with the carriers with which their agencies do business.

IA&B has been collecting and sharing members’ opinions with both carriers and agents since 2004.

This report is divided into four sections:

For more information: Visit IA&B’s Company Satisfaction Index interactive online tool at iabgroup.com/csi. The tool is designed to provide an overview of both personal and commercial lines results, a comparison among carriers and an in-depth look at each carrier’s individual results by question.

1. Outline of the index's structure and methodology The survey was open to all employees of any IA&B member agency from April 16 to May 15. While previous surveys asked members to rate both personal and commercial lines carriers, the Board of Directors decided to make this an annual assessment and to rotate survey years between personal and commercial lines carriers. With the focus solely on personal lines in 2012, there was an 80 percent increase in the number of personal lines surveys returned compared to 2010.

Only carriers receiving 15 or more completed surveys are included in this report.

This was also a change from previous years, when carriers made the final results with only 10 returned surveys. In 2012, one fewer carrier was included in the survey compared to 2010.

Results allow carriers to assess performance in an independent way and compare that performance with other carriers.

2. Key findings by carrier group The report differentiates the carriers based upon direct premium written (DPW) and the number of states in their footprint. Carriers were divided into one of four groupings: • • • •

Regional carriers (R I) operating in 1-10 states with less than $100 million in DPW Regional carriers (R II) operating in 1-10 states with more than $100 million in DPW Super regional carriers (SR) operating in 11 to 34 states National carriers (N) operating in 35 or more states

The results show that members’ satisfaction with each carrier group decreased slightly since 2010, but it was the regional II carriers which received the most favorable marks from survey participants, followed closely by regional I carriers.

3. Individual carrier results To qualify for the final report, a carrier must have received 15 or more completed surveys. In total, 38 carriers were included. This report includes an alphabetical listing of those carriers and their results. Additionally, IA&B offers an interactive, online tool of the results, which allows the user to sort the results based upon carrier ranking or by any of the four key categories. The online tool also allows the user to see a side-by-side comparison of carriers and an in-depth examination of each carrier’s individual results by question. The online tool can be found at www.iabgroup.com/csi.

4. Key findings by category and questions The survey asked members to share their opinions based upon four key categories of their carrier relationships: • • • • www.iabgroup.com I (800) 998-9644 I (717) 795-9100

Products, Pricing & Underwriting Policy Service & Claims Agency/Company Relationship Technology

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1. Survey Structure and Methodology

IA&B members were asked to rate at least their top three carriers with which they place business.

A total of 507 surveys were completed. This marks an 80 percent increase in participation since 2010.

On average, respondents rated six carriers, an upsurge from previous years.

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SURVEY STRUCTURE AND METHODOLOGY

Participants rated their carriers on a four-point scale of satisfaction – with four (4) meaning satisfied and one (1) unsatisfied. They offered opinions on four key categories of their carrier relationships: 1) 2) 3) 4)

Products, Pricing & Underwriting Policy Service & Claims Agency/Company Relationship Technology

Results allow carriers to assess performance in an independent way and compare that performance with other carriers. One goal is the overall improvement of performance for the benefit of the carrier, the agents IA&B serves and the consumers served by both.

The survey results could also serve these purposes: 1) 2) 3) 4)

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For an agency to benchmark its relationship with its carriers.

For an agency seeking new carriers to use the benchmark for the interview process.

For a carrier to validate its perception or as a “calling” to improve.

For IA&B to use constructively in dialogue with carriers.

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SURVEY STRUCTURE AND METHODOLOGY

Respondents rated 64 carriers, although nearly half the carriers were not integrated into this report since only carriers with 15 or more completed surveys are included in the final results. In total, 38 personal lines carriers are included.

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SURVEY STRUCTURE AND METHODOLOGY

Only carriers with 15 or more ratings can qualify for inclusion in the final survey results. In 2012, three personal lines carriers that were not included in the 2010 results became eligible: Motorists Insurance Group, Peninsula Insurance Company and Philadelphia Contributionship. There were four carriers included in the 2010 results that are not included in the 2012 report, including Everett Cash Mutual, Farmers Insurance Group and Frederick Mutual Insurance Company. Additionally, Ohio Casualty – now the commercial lines arm of Liberty Mutual Agency Markets – was included in the 2010 results, but now the personal lines brand, Safeco, is solely represented in this report.

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SURVEY STRUCTURE AND METHODOLOGY

By comparing previous survey results, the index shows how respondents’ satisfaction with each carrier improved or declined. Of those carriers included in the 2010 results that were also included in this year’s results, only 20 percent improved their rating from 2010, while 80 percent declined.

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SURVEY STRUCTURE AND METHODOLOGY

Any employee of an IA&B member agency in Delaware, Maryland and Pennsylvania was eligible to participate. Combined, principals and CSRs accounted for the majority of returned surveys.

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2. Key Findings by Carrier Group This report differentiates the carriers based upon direct premium written (DPW) and the number of states in their footprint. Carriers were divided into one of four groupings: ■

Regional carriers (Regional I) operating in 1-10 states with less than $100 million in DPW

■

Regional carriers (Regional II) operating in 1-10 states with more than $100 million in DPW

■

Super regional carriers operating in 11 to 34 states

■

National carriers operating in 35 or more states

Respondents indicated their highest level of satisfaction on the whole for personal lines was with their regional II carriers, which showed very little change from 2010. All carrier groups declined slightly in overall performance, with the super regional carriers seeing the most change.

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KEY FINDINGS BY CARRIER GROUP

Respondents were once again most satisfied with the regional I carriers for personal lines products, pricing and underwriting. Participants liked their regional II carriers for the next-to-top spot – the same position they held in 2010. After a two-year decline in satisfaction for regional II carriers, the group showed improvement. Respondents were again least satisfied with national carriers, but this group showed a slight improvement since 2010.

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KEY FINDINGS BY CARRIER GROUP

The super regional carriers which sat atop the personal lines policy service and claims category in 2010 slid all the way to least satisfied among carrier groups this year. Respondents were most satisfied with their regional II carriers followed by a strong showing by national carriers. The super regionals’ decline in members’ satisfaction is what stands out in this year’s report. The group surged strongly from 2008 to 2010 and then dropped sharply this year. Regional I carriers also saw a decrease in members’ satisfaction.

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KEY FINDINGS BY CARRIER GROUP

Technology was once again the category where agencies expressed their greatest dissatisfaction with carriers. With regard to using technology in personal lines, respondents had the greatest satisfaction with both the super regional and regional II carriers, followed by national carriers. Regional I carriers showed only a slight decrease in satisfaction from 2010 but remained at the bottom of the rankings.

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KEY FINDINGS BY CARRIER GROUP

Respondents were most satisfied with regional II carriers in the agency/company relationship category.

In fact, both regional II and national carriers saw a slight increase in satisfaction from 2010. Respondents were most satisfied with the regional I carriers in 2010, but this carrier group dropped slightly to the second spot this year, followed closely by the super regional carriers.

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3. Individual Carrier Results

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4. Key Findings by Category and Questions Participants rated their carriers on a four-point scale of satisfaction – with four (4) meaning satisfied and one (1) unsatisfied. They offered opinions on four key categories of their carrier relationships: 1) 2) 3) 4)

Products, Pricing & Underwriting Policy Service & Claims Agency/Company Relationship Technology

After four continuous surveys showing overall average improvement, that trend was snapped this year with a slight decrease in satisfaction. Overall average satisfaction is still higher than respondents’ satisfaction levels in 2004 and 2006. Where noted below, a few statements were added to the 2012 survey based upon member input.

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K E Y F I N D I N G S B Y C AT E G O R Y & Q U E S T I O N S

Products, Pricing & Underwriting In this category, the average score declined slightly for the second consecutive survey period. New to this survey was a statement seeking satisfaction with the carrier’s underwriting guidelines being clear and comprehensive.

–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier offers competitive products and features.

3.190 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier provides competitive pricing.

2.999 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier provides consistent and stable markets.

3.238 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier’s underwriter(s) is accessible.

3.344 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier’s underwriter(s) has sufficient knowledge and training.

3.483 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier’s underwriter(s) responds within an acceptable time frame.

3.416 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier’s underwriting guidelines are clear and comprehensive.

3.413 ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

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K E Y F I N D I N G S B Y C AT E G O R Y & Q U E S T I O N S

Policy Service & Claims Respondents were the most satisfied with their carriers in the category of Policy Service and Claims, as this classification continued to receive the best average score. New to this survey were two statements. The first asked members for their satisfaction with the carrier’s promptness to endorsement requests, and the second on the carrier’s effectiveness with communicating with the agency during the claims process.

–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier has prompt policy issuance.

3.581 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier responds promptly to endorsement requests.

3.519 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier has accurate policy issuance.

3.703 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier offers convenient payment options.

3.600 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier adjusts claims promptly (within 24 hours).

3.350 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier adjusts claims fairly.

3.511 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier effectively communicates with my agency throughout the claims process.

2.943 ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

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K E Y F I N D I N G S B Y C AT E G O R Y & Q U E S T I O N S

Technology As with previous surveys, technology remained the area in which respondents expressed the greatest degree of dissatisfaction with their carriers. There were no changes to the survey statements in this category.

–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier's technology is reliable (up-time).

3.414 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier supports upload/download with my agency management system.

3.557 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier has invested in and is committed to Real Time (a single workflow for servicing or quoting such as TransactNOW or Transformation Station.)

3.155 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier's use of Real Time has provided opportunities for my agency.

2.974 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier's technology initiatives provide my agency with an ease of doing business.

3.281 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier's use of technology has shifted more burden to my agency. (If the company's technology initiatives have simplified your agency workload, the response would point toward "satisfied"; if, however, the company's technology initiatives have resulted in an increased workload to your agency, the response would point toward "dissatisfied.")

3.071 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier provides technical expertise for my agency.

3.172 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier seeks agent input during the planning process of its technology initiatives.

2.467 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier uses technology effectively with my agency.

3.258 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– 18

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K E Y F I N D I N G S B Y C AT E G O R Y & Q U E S T I O N S

Agency/Company Relationship In the category of agency/company relationship, respondents’ satisfaction decreased ever so slightly from 2010, and several new statements were added. Included for the first time were statements relative to the carrier’s marketing initiatives supporting the Independent Agency System, the carrier’s communications being clear and timely and, finally, a statement asking respondents to rate their satisfaction with any shift in responsibilities that were once the carrier’s to the agency.

––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––– The carrier is committed to the Independent Agency System.

3.414

–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier's marketing initiatives support the Independent Agency System.

3.247 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier offers a good commission schedule.

3.241 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier offers a good profit sharing plan.

2.939 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier has clear and timely communications.

3.307 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier provides assistance programs for producer hiring, agency perpetuation and agency growth plans, etc.

2.571 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– The carrier has shifted responsibilities and functions to my agency that were once the carrier’s responsibility and function.

2.842 (If the company has not shifted responsibilities and functions to your agency, the response would point toward “satisfied”; if, however, the company has shifted responsibilities and functions to your agency, the response would point toward “dissatisfied.”)

–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– I have confidence in the carrier’s future direction.

3.279 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– I have confidence in the carrier’s management.

3.262 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– This carrier appears to be financially stable.

3.593 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– This carrier has a strong position in my agency’s plans for the future. (If “yes” the response would point toward “satisfied”; 3.350 if “no” the response would point toward “dissatisfied.”)

–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– I would recommend this company as a good company to another agency. (If “yes” the response would point toward “satisfied”; 3.428 if “no” the response would point toward “dissatisfied.”)

–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– www.iabgroup.com I (800) 998-9644 I (717) 795-9100

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IA&B is an organization dedicated to effectively preserve and advocate the American Agency System as a value-added distribution method, and to the development and availability of programs, products and services that partner with our members and customers in sustaining and advancing their operations.

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