J.D. Power: Carriers Come Up Short for Independent Agents

The more satisfied independent agents are with a carrier, the more business they will write with that carrier. But according to the J.D. Power 2019 U.S. Independent Insurance Agent Satisfaction Study^SM, carriers are leaving a lot of money on the table.

The second annual study, which was developed in alliance with the Big “I,” evaluated the property-casualty independent insurance agent’s business outlook, management strategy and overall satisfaction with personal lines and commercial lines carriers in the U.S.

The study found a wide gap between agent expectations and what carriers deliver, with overall agent satisfaction ranking lowest among business relationships measured by J.D. Power.

J.D. Power measured key performance indicators (KPIs) that had the greatest impact on agent satisfaction with their carriers, including ease of doing business, communication, support, and policy and underwriting flexibility. Achieving KPIs dramatically affected a carrier’s overall satisfaction score—a carrier that achieved all the top KPIs had an average score of 928, while those that missed five KPIs had an average score in the 600s.

“Some carriers are focusing on driving agent satisfaction, and we’re seeing that translate to increased revenue and business for them,” says Tom Super, director, Property & Casualty Insurance Practice at J.D. Power. “And there are others that have taken a little bit of a different tactic—‘Let’s focus on the end consumer, and by focusing on the end consumer, we’ll make agents happy in that process.’”

Super notes a dose of both approaches is probably optimal. And while there isn’t a silver bullet to driving agent satisfaction, Super says carriers need to “have deeper relationship with the independent agents that work to support their business, and then continuously find ways to drive improvement and enhance that relationship.”

Not meeting agent expectations is costing carriers measurable dollars. J.D. Power estimates that if carriers could reduce the number of independent agents that give them a failing grade on more than five KPIs, they could increase revenue by 6%—or $1 million per 1,000 independent agents.

What can agents proactively do to foster a better carrier experience? Super says agents should continue to reward carriers that are delivering ease of doing business and other business needs. “It reinforces to the carriers, ‘OK, these are the things we need to focus on,” he says. “If agents place business with carriers that are getting it right, other carriers will look to replicate that type of model.”

Auto-Owners Insurance ranked highest among personal lines carriers in the study for the second straight year, with an overall satisfaction score of 800. Progressive ranked second at 762, while Safeco and Travelers tied for third at 737.

Liberty Mutual performed highest among commercial lines carriers for the second straight year with an overall satisfaction score of 749, followed by Chubb and The Hartford, tied at 720.

Katie Butler is IA editor in chief.