Agency Satisfaction is Closely Linked to the Amount of Business Sent to Insurance Companies
WESTLAKE VILLAGE, Calif.: 25 March 2009 – Offering various types of insurance policies that meet diverse customer needs and ensuring that efficient, courteous and knowledgeable contacts are available have a particularly strong impact on overall agent satisfaction with insurance companies, according to the J.D. Power and Associates 2009 Insurance Agency Satisfaction StudySM released today.
The inaugural study measures the satisfaction of independent insurance agents and agency staff with the personal property and casualty insurance companies they represent. Agent satisfaction is examined across six factors. In order of importance, they are: key carrier contacts (32%), policy offering (23%); claims (16%); technology (13%); price (10%); and compensation (5%).
“Although it may seem that compensation would be the primary driver of agent satisfaction, in fact, elements that are related to agent support and products are the key differentiators,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates. “Insurers that provide helpful and knowledgeable business contacts and provide a variety of policy offerings help to better meet the needs of consumers, which leads to greater levels of satisfaction among agents.”
The study finds that agent satisfaction typically increases the more often agents interact with the business contact from their insurance company. Agents prefer to receive business contacts via phone or e-mail at least once or twice a month. However, satisfaction levels are particularly high when the business contact visits more than once per month. In 2009, fewer than 15 percent of agents report receiving such frequent visits.
“Contacting agents on a regular basis to provide support is critical for an insurance company, particularly when it comes to business growth,” said Bowler. “Agent satisfaction is very closely linked to the overall business growth of an insurer, as agents have tremendous influence over policyholders when it comes to switching providers. In fact, 60 percent of consumers report that they would follow their agent recommendation to switch to a new insurance company. Clearly, agent satisfaction can have a major impact on policy growth for an insurance company.”
In particular, as agent satisfaction increases, the likelihood of agents increasing their premium business with an insurance company also rises. In 2009, nearly 70 percent of agents with satisfaction scores averaging more than 800 points on a 1,000-point scale indicate they intend to increase business with the insurance company. In contrast, only 28 percent of agents with scores averaging 600 points or less indicate the same.
Offering a marketing or advertising budget also greatly impacts agent satisfaction, according to the study. In 2009, nearly 60 percent of agents report that they did not receive any budget for local marketing or advertising. However, among those agents who received and used all of the funds provided by the insurer for advertising and marketing purposes, satisfaction scores average 808, compared with an average of 692 among those agents who were offered no funds for such endeavors.
The study also finds that satisfaction declines considerably as the amount of time it takes for insurance companies to notify agents of a customer-filed claim increases. When agents are notified on the same day that a claim is filed by a customer, satisfaction averages 781. When notification takes place within one or two days, satisfaction declines to 724, on average. Satisfaction declines further, to an average of 638, when insurers wait more than five days before issuing notification.
“It is clear that consumer satisfaction increases dramatically when the agent is involved in the claims process,” said Bowler. “However, it often falls to the insurers to notify their agents of a customer-filed claim in a timely manner in order to help agents be successful in satisfying their customers.”
The 2009 Insurance Agency Satisfaction Study is based on responses from 1,589 insurance agents evaluating more than 10 insurance companies across the industry, including AIG, Allied, Chubb, Erie Insurance, Farmers/Foremost, Fireman�s Fund, The Hartford, Liberty Mutual, Progressive and Travelers. The study was fielded in November 2008.
About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services firm operating in key business sectors including market research, forecasting, performance improvement, Web intelligence and customer satisfaction. The company�s quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.
About The McGraw-Hill Companies
Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor�s, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2008 were $6.4 billion. Additional information is available at http://www.mcgraw-hill.com.