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October 14, 2009
Pc Trends: The Easy Button Study finds ease of doing business crucial for agents choosing a carrier.
by Michelle Payne
Travelers or Liberty Mutual? MetLife or Safeco? When it comes to carriers, independent agents have many options of companies to work with, but what sets one apart from another and ultimately leads to a collaboration that’s beneficial to both parties? What it really boils down to is how easy it is to do business with a carrier, according to the Ease of Doing Business National Survey.
The survey polled 6,000 agents and brokers and found that 84% of respondents believe a carrier’s ease of doing business performance is crucial when choosing a carrier.
“Ease of doing business is absolutely critical for agents’ productivity and profitability…how easy a supplier is to do business with makes a huge difference,” says to Nort Salz, president and CEO of Deep Customer Connections, the company responsible for the survey. “If an agent can quote and issue a policy in half as much time and with half as much work with one company in comparison to another, it’s not hard to imagine where they’ll go.”
Jack Puckett, agency principal at Capstone Insurance Services LLC, in Greenville, S.C., works with 12 all-lines carriers and a wide array of online workers’ compensation carriers and agrees with the strong emphasis survey respondents placed on the ease of doing business.
“The ease of doing business is really important to the people inside the agency, the customer service representatives and producers,” he says. “When it comes down to transacting, the ease of doing business wins a lot. The customer service reps and producer have a lot to do with it because they are going to go to the path of lease resistance. It doesn’t do you any good to get five quotes when you can’t get them done in time.”
The survey asked agents and brokers questions regarding: the importance of ease of doing business when deciding which p-c carrier earns their business; the importance of each of the 10 factors that make up ease of doing business; how p-c carriers perform against these 10 factors; and what the two most important things carriers can do to be easier to do business with.
The survey identified 10 factors that contribute to the ease of doing business and used these factors to create a model to rate carriers’ performance. The factors include:- Understanding of the needs of agency personnel;
- Responsiveness in underwriting;
- Flexibility in underwriting;
- Accurate, timely policy services;
- Effective, user-friendly technology;
- Handling claims properly;
- Handing claims fairly;
- Providing marketing support;
- Providing insurance expertise an support (i.e. loss preventions programs); and
- Ease for the insureds to do business with the carrier.
Of the 10 factors, agents said the most important is underwriting responsiveness, followed closely by handling claims promptly and handling claims fairly.
“The most important EDB factors have to do with carrier performance during the underwriting and claims processes,” the study says. “Agents in particular want it all: the personal, organizational and technical responsiveness that enables them to convert a prospect into a policyholder quickly and to keep that policyholder over the long-term with effective claims handing.”
An unexpected survey finding was that ease of doing business concerns much more than technology. Out of the 10 factors, technology was ranked sixth in importance and fourth in terms of opportunity.
“A lot of people think technology when it comes to ease of doing business, but there are other things like whether claims are handled fairly and properly and does the carrier provide timely, accurate policy services…the ease of doing business is the whole experience an agent has when dealing with a carrier,” Salz says.
However, technology, especially single-entry ratings products, is still extremely important when it comes to ease of doing business and choosing a carrier, according to Puckett.
“Remember when you were in high school or college and a teacher handed you an hour of homework? To them that seemed reasonable, but they lose sight of the fact that you have homework from five other classes. Well the carriers are the same way. They think what they are delivering to an agency is wonderful, but they lose track of the fact that we have 15 other carriers. So it’s sort of like the teacher who loses perspective that you have other classes,” he says.
The survey determined a wide variance in performance among the 200 carriers ranked by respondents, and even within carriers’ performance on individual ease of doing business, factors varied significantly. The survey’s measure of performance and opportunity, the EDB IndexSM , ranged from the 60s for some carriers to the mid-90s for the strongest performers. (An index of 100 means performance matches expectations perfectly, lower numbers show more need for improvement.)
One thing that hasn’t varied though is the value agents and brokers place on the various factors contributing to ease of doing business. There has been consistency in where respondents’ since the survey was first conducted, according to Salz.
“I think…what it means is that, to a fair extent, a lot of carriers are doing well and working hard at it,” he says. “When you’re already doing a good job, it’s hard to make incremental improvements.”
