Along with becoming a preferred carrier (an option I discussed last week), insurers can also create more value in their independent agency (IA) channel by building a high-performance agency network. Insurers can take action to help their IAs think and act more strategically about people, processes, and technology.
Four key areas stand out:
- Optimize compensation and performance management. Employing a more nuanced approach to compensation and performance management can enable incentives that are more closely aligned with strategic objectives and how each agent does business.
- Provide data and analytics capabilities. Simple, relevant, personalized, data-backed recommendations delivered regularly to agencies through multiple channels (including mobile) can give IAs the predictive and actionable insight they need to better attract, serve, and retain customers.
- Expand agent segmentation. “Soft” criteria for an agent segmentation analysis—for example, an agent’s ability to adapt to change, degree of technology savvy, prior business experience, management style, and local market characteristics—can provide deeper insight into the agent population and how best to create competitive advantage through the IA network.
- Leverage customer segmentation. Through more effective use of customer data and related information, carriers can help improve the way agents manage and prepare for each valuable prospect or customer interaction.
Based on current market trends, winning the hearts of the independent agency network will produce the most significant returns for the investing carriers. Carriers hoping to maximize this opportunity for profitable growth should invest in creating preferred relationships with targeted agency partners, while providing those IAs that perform at high levels (strong retention, cross sales and new business production) the support they need to become even more effective sales and retention vehicles. Doing so creates a “win-win-win” for customers, IAs and carriers.
To learn more about two approaches to empower the IA channel, read the full report: Creating Value in the Independent Agency Channel.