The independent agency (IA) channel still reigns as the dominant distribution channel in insurance. Accenture’s recent survey of US consumers shows that despite growing interest in digital and other “direct” experiences available in insurance, customers continue to favor doing business with IAs.
Nearly 70 percent of consumers prefer to receive quotes on a policy through an IA; 71 percent prefer to set up and pay for their auto and home insurance policies in person with an agent; and 66 percent prefer working with an IA because of the expertise they provide as well as the agent’s ability to help them compare multiple brands and find the best value (figure 1).
Yet, without substantial attention to improving the customer experience, independent agents are vulnerable to continued, steady advances in the direct channel.
Creating more value in and through IAs requires insurers to address nuances of the channel. The agency market is highly fragmented, largely local, and consists of companies run by small business entrepreneurs. As a result, the industry generally suffers from a lack of skill, scale, scope, and access to capital (figure 2).
Carriers can help independent agents address these challenges and enhance their effectiveness by investing in two key strategies:
- Become a preferred carrier across a larger number of agencies, and
- Build a high-performance agency network that thrives on the carrier’s strengths.
Next week, I’ll offer ideas for how carriers can claim the preferred position with IAs.
To learn more about empowering the IA channel, read the full report written by my colleagues Kevin Callahan and Michael Freilich: Creating Value in the Independent Agency Channel.