2020 The Perfect Storm – How the Insurance Agent-Client Relationship is Changing

I have never felt so uneasy about a time I was living in; would you agree? In March of this year our lives and the way we live changed and, in some ways, will never go back.

Covid, to an active tropical storm season to wildfires and and then to civil unrest. Added to that we have businesses suffering, homes facing economic uncertainty and to top it off we are facing a hardening insurance marketplace!

I am involved in a lot of social groups in the insurance industry and I see two distinct camps. There are the “Chicken Littles” and the “I’m Batman” tribes! But for many of us we are a little mixed. One day you want to stay in bed and watch that 3rd hour of The Today Show, but the next you are ready for the fight.

So what should you do? Things have changed and are changing for your business. Today, we are going to talk about how to weather the storm and keep your ship moving in the right direction.


What to Do…What to do!

While I do think that every once in a while that 3rd hour of Today is ok, the fighting urge is what you need to focus your intentions on!

A basic tenet of accounting is that for every debit there is a credit. Taking this theory into everyday life, do you want to be debited or credited? With all of the uncertainty around us also comes opportunity.

Our commercial business clients need help navigating their relationship with their carriers. Both from the ones who are booming, like pizza shops and distributors, to the ones who are  suffering, like small retailers.

They need help planning for lower exposure in sales and payroll or the opposite. They need help with understanding their coverage. We see that so much in times of disaster.

Our personal lines clients have their own challenges. Things like cyber exposure to the need for financial advice.

Many insurance agents are sitting back waiting and hoping things go back to normal. But the reality is , is that we need to focus. Tuning out the world is tempting, but in order to succeed we need to focus on what our clients need.

The #1 focus for insurance agents right now should be to focus on their prospects and clients needs. Take it one day at a time, helping one client or prospect at a time.


As usual what we think they think, is not what they really think!

There was an article recently in the National Underwriter. A study surveyed 2,600 U.S. independent insurance agents, small-business owners, mid-market business owners, mid-market business owners with fleet vehicles, and general consumers between June 9 and June 25 to understand what business owners and consumers value in their insurance relationships.

The disconnect was significant between what the agents thought and what the consumer thought!

In one example, 95% of insurance agents said they are always there when their clients need them, but only 79% of customers felt the same. Similarly, 94% of agents reported they are regularly checking in with their customers; however, only 69% of customers said they receive sufficient check-ins from their agent.

The perception gap is slightly wider concerning small-business clients: 95% of insurance agents reported they’re always available for small-business owners, yet only 75% of the customer base agreed. Also, 69% of small-business owners feel their agents offer the best prices, whereas 91% of agents said their prices are the most competitive.

The study also found that nearly half of the small-business owners and consumers and the majority of the mid-market business owners also struggle to understand coverages in their policy and find it challenging to find the best price for protection needs.

Insurance agents also are facing similar difficulties: 55% of agents said they struggle to educate clients on the coverage they need, and 46% of agents said providing the level of service customers demand is a challenge.

This article and study also gave some good information on what clients want. This is opportunity to nurture and harvest.

  • 26% of consumers want guidance on retirement planning
  • 39% of small-business owners want help with business interruption or disaster planning
  • 35% of small-business owners are interested in safety and loss control resources
  • 18% of small-business customers want information on cybersecurity and retirement
  • More personal lines customers conduct their insurance business online
  • Small-business clients still prefer the value of in-person agent interactions. Just 32% said they prefer to handle their insurance needs online

All this data means two things.

  1. There’s room for improvement in your customer service.
  2. There are opportunities for new business from incumbents  who are not servicing clients as well as they think they are.

Do you know how your clients really feel about your agency?

Service needs in the new normal

In the Personal Lines marketplace an Agent Authority study illuminates that customers continue to need expert advice from insurance agents, with 44% of consumers currently reviewing one or more of their insurance policies, and 26% checking with their agent to discuss coverage. The survey goes on to say that nearly half (47%) of consumers find it challenging to understand what is and is not covered in their policies. And 55% of agents say they struggle in the area of educating their clients.

The study concludes that it is critical to stay in contact with your client. For small and middle market commercial at least twice a year and personal once a year outside of renewal.

There has always been a need for better agency service. But now, in the new normal, you must find better ways to service your clients in order to grow.

Here are several service ideas for the new normal:

  • Educational Resources on your website
  • Digital Insurance tools
  • New client onboarding processes
  • Offering digital communication tools

Also keeping up on trends, such as telematics and automation.

If you’re unsure how well you’re doing in this area or how your clients really feel then survey your clients. You m ay be surprised at what you find!


Selling in the new normal


People are worried about the economy. Almost half (45%) are looking at the bottom line. It is important to make them consider the value, not just the price.

What value does a client gain from doing business with your insurance agency? When a prospect is thinking $$ and you’re pitching service, you’re not offering true value. Show them how you add value and how it affects their bottom line.

Here are a few ideas:

  • The most obvious is offering a lower insurance rate, but this is not always the most effective
  • Use insurance software like Zywave to help them manage the total cost of risk
  • Take the conversation away from insurance and show them where your agency can save them time, energy, and productivity which in turn may be more valuable than price.

It is important to weigh the financial commitment against the best protection option. Reliable and fair claims service, digital customer solutions, and the financial strength and stability of the carrier all play roles in meeting the customer needs.


New needs and new solutions

26% of your clients want help with retirement. 16% want to be more comfortable with their cyber exposure. And almost half want to have access digitally with their insurance.

As insurance agents we need to stop selling and offering solutions based on our wants and comfort level. Time and time again we’ve seen the stories and statistics on what clients really want and what we are actually offering.

One of our largest clients loved us because they could handle their own insurance needs online.

 As the world changes, and as the marketplace evolves, we need to be aware of the changing needs of the buyer and the solutions that are available.


So, what is your response?

Successful agencies are converting their customer experience more digitally.  From meeting, to quoting and binding to providing information and most importantly staying in touch. With the growth of technology and competition, just being the “local” agent isn’t enough to survive.

Do you have an automated marketing and sales tool? Does your tool do it all or talk to the other programs it needs to? Can you tell in a dynamic way, who needs your advice or counsel? Do you have data on what is important to each client based on their behavior?

The world is changing and we have to build our customer experience to meet the consumer’s expectations, not the agency’s convenience!


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