Sound Off: How Agents & Carriers Forge Success
Insurance Networking News, September 1, 2008
The agent/carrier relationship is like no other-sometimes considered a match made in heaven, it also can be a source of bitter frustration as both parties try to make their expectations known and communicate effectively. INN gathered like minds in this exclusive forum, which offers perspectives as varied as their origination: a carrier that works primarily with a broker/dealer network, a successful independent agent, an industry consultant and two industry experts who represent agents, their technology efforts and the standards used by both agents and carriers. INN's exclusive forum addresses the all-important shared objective: building business together.
Describe the ideal state of the agent-carrier relationship. Is it a partnership? What should each party bring to the relationship in terms of technology?
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BARTOSH: The ideal agent-carrier relationship today is definitely a partnership. Over recent years, many tasks have been outsourced back to the agency. In many cases, these tasks are best performed at the point of client contact. From a technological point of view, each side has responsibilities. The company needs to provide more access to the systems that we need to support our client's needs, and this must be offered in a real-time environment. Our clients are in our office or on the phone, and need immediate access to information. From the agency side, we must keep up to date with our own technology-not just with hardware but, most importantly, in the software area of maintaining the most current versions of our agency management systems. Agencies also must embrace the technology and break out of the status quo to take on the efficiencies that come from the implementation of new workflows.
BATES: We've been talking about the agency/carrier partnership for years, but it really isn't a partnership-it's more of an "open distributor-manufacturer" relationship. Carriers like to think in terms of "partnership" because that implies a one-on-one relationship, but in reality, each carrier has multiple relationships and each agency has multiple relationships. It's more like an "open marriage."
The true agency/carrier relationship is one in which both are competing with each other for time, attention and business concessions. Carriers want more production, solidly underwritten risks, attention to detail and full disclosure from agencies/brokerages. Agencies want market availability, ease of doing business, underwriting understanding and flexibility, and attractive pricing. Many of those "wants" actually conflict with each other. That is why a distributor relationship is a better description than a partnership. Partners share goals; distributors find sources to fill a need.
Moreover, in a partnership, the competition has ended. If a husband had to constantly compete with other men, the marriage would probably not be a great partnership. In a distributor relationship, the market must compete because it knows the distributor has many market options. The "partnership" philosophy takes the responsibility off the carrier to compete, and off the agency to demand. By reframing that relationship from "partnership" to distributor-model, we approach the issues differently and more productively.
Carriers will have to compete for an agency's business in a way most do not compete now. Making the agency's work easier would be a great way to compete. Offering compensation schedules that are based on a specific agency's historical loss ratios would be another way to compete.
DEARMAN: Trust-based relationships are the cornerstone of our business in every segment of the value-chain. From client to agent, agent to broker/dealer and broker/dealer to carrier, the same key components, consistently delivered, are the ones that create robust partnerships and allow them to flourish. We believe that these key components are a three-legged stool comprised of product, relationship and service.
First, the product that the carrier brings to the table must be responsive to the financial goals of the customer and provide a unique and cost-effective way to meet their needs. Second, a carrier must be willing to invest in building relationships that afford an open and honest exchange of information. These interactions must begin with the carrier, establishing a clear understanding of the needs, desires and goals of the customer (whether it's an investor, registered representative or broker/dealer). Third, the relationship must be sustained with proactive and agile support and service. A "once-and-done" relationship is no relationship at all.
When properly implemented, technology can help in all three of these areas. In the areas of products, illustration systems, integration with order entry capabilities, easy-to-use product research tools and flexible administration systems can provide agents and broker/dealers (BDs) with the tools they need to focus their time on the client rather than on administrative tasks. Relationships are cemented when carriers use technological innovations in contact history, customer relationship management and real-time service-level reporting to ensure that clients receive personal, proactive and knowledgeable service. Nothing kills the feeling of personal service faster than 90 seconds of typing answer after answer into a phone tree system, only to be greeted with a "please provide your agent number" prompt. (The subtle lesson here is that technology can be your foe, too.)
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