Independent property/casualty insurance agents are facing one of the most brutal hard markets in decades and many of them are struggling as they have to deliver bad news of non-renewals sometimes on a daily basis.
With no end in sight to the market madness, agencies are taking steps to stay strong and help their employees cope, according to the latest Big I market report.
The Independent Insurance Agents & Brokers of America’s (Big I) “Navigating the Hard Market” survey also found that many agencies are struggling to retain staff, either because they are unable to meet certain metrics, or candidates and staff find other work with better pay.
The hard market is also weighing heavily on employees who are at the front lines when having to have hard conversations with clients about their coverage.
Here’s a snapshot of the study’s main findings:
Staying in front of clients a priority
The study found that 65% of agencies had stepped up their client communications during these difficult times in the following ways:
- E-mail communications: 85% have stepped up sending alerts, newsletters and early reminders about policy renewals.
- Phone calls: 77% are calling clients more frequently.
- Educational material: 75% of agents are trying to educate their clients about the market realities.
- Community involvement: 47%.
- Paid advertising: 18%.
Also, 57% said they had changed the tone of their client communications due to the hard market.
One agent was quoted as saying: “You need to have a defensive and offensive strategy in your office — defensive in that you need to set up processes to retain clients. Your offensive strategy is to increase your marketing. In a disrupted market it is an ideal time to make sure you are very visible. Whatever strategies work for your agency — double down.”
Hard market weighs on staff
The hard market is pressuring agencies like never before, particularly in areas that insurers have been abandoning, forcing many to go to state-run or affiliated markets of last resort. Agencies were asked how they were managing increased demand or inquiries from clients during the hard market. Their answers:
- We shifted roles of teams – 36%
- We don’t have a handle on it – 29%
- We added technology – 18%
- We hired more staff – 16%
The survey found that many agencies are struggling to keep up morale due to hard-market pressures. Asked how they were maintaining team morale and motivation, some agents responded:
- “We have team lunches every day to ensure we’re on the same page, as well as team incentives.”
- “Not at all. It hasn’t hit the sales agents that retention is more important than ever. It’s fallen on two licensed CSRs to do all the retention work.”
- “Recognizing that many of my staff haven’t been through a hard market before, we encourage our agents to talk about conversations with clients to continue to improve and learn from others via role play. As agency principals we have also given our team the power to ‘fire’ a client if necessary.”
- “Small office with owner/agent and four employees. We talk every day and share our thoughts and info we find helpful.”
- “Keep the client’s struggles in mind when working with them. We have streamlined our platforms and carriers to work smarter and not harder. Offering incentive bonus to keep grinding. Introduced one team meeting a month where the primary function is for team building by having fun.”
Half of respondents said they have initiated new training programs to help their staff handle these new challenges, while another 16% said they need to start a training program.
Renewals are taking longer
Renewals and remarketing policies are also taking longer than before and that means agencies have to spend more time and resources, particularly if they have to find new coverage.
How far in advance agencies are working for commercial lines renewals:
- 1-3 months: 77%
- 4+ months: 12%
- 0-1 month: 11%
How far in advance agencies are working for personal lines renewals:
- 1-3 months: 61%
- 0-1 month: 37%
- 4+ months: 2%
The takeaway
The current market challenges have proven that insurance agencies need to constantly be nimble to weather dramatic and drastic changes. The industry is cyclical and hard and soft markets come and go. The agencies that are able to react and shake up how they do things will be better equipped to weather tough times.
If there is one takeaway from the Big I report, it’s that agents can’t be complacent, and they need to stay on top of developments and make adjustments when things get tough. They need to step up communications with clients and get ahead of the bad news if they have to deliver it.
