Two-thirds of agencies set to continue hybrid work model and with higher volumes of customer retention
The State of The Independent Insurance Agency Report, developed by The Hanover Insurance Group, Inc. (NYSE: THG), indicates independent agents are embracing a more progressive work environment in response to the pandemic and evolving market conditions. With agencies expected to offer additional employee flexibility, engage more digitally with their customers, and enhance customer and employee experiences, the report highlights the current state of the industry and provides a glimpse at the future of agencies across the country.
“In the face of significant challenge and uncertainty, many independent agencies have succeeded over the past 18 months, taking away some very valuable lessons that will help them as they seek to more effectively serve their customers and build their businesses going forward,” said Richard W. Lavey, president, Hanover Agency Markets. “Our survey shows customers have remained loyal to their independent agents. As agency owners look to the future, it’s more important than ever that agents maintain strong retention, working with carriers that can support – and continue to enhance – business models with increased flexibility for staff and increased digital accessibility and services to take customer and employee experiences to the next level.”
2021 State of The Independent Insurance Agency Report
- Flexibility is here to stay – 66% of agency owners state they expect to continue working in a remote/hybrid model
- Customers remain loyal – 72% of agency owners report experiencing increased customer retention
- Agencies are optimistic about growth – 62% of agency owners report agency growth
“We learned a lot about independent agents over the last 18 months and the report proves the industry continues to pivot to meet customer expectations while providing great resiliency,” said Angela Roman-Grimaldi, vice president enterprise distribution at The Hanover. “The support of strategic carrier partnerships with advanced technologies help agencies thoughtfully address any obstacle customers may face. Additionally, the independent agent model continues to thrive and innovate in a modern working environment by being flexible with employees.”
As agents seek to set their businesses apart from their competition and agencies are expected to continue to face challenging market conditions as they reimagine the future of their businesses, The Hanover has created an Independent Agent Customer Growth and Retention Checklist to help agents build their business in the coming months. The checklist is based on conversations with its agency partners and its own observations of market trends, developments and evolving agency best practices.
Independent Agent Customer Growth and Retention Checklist
- Stay ahead of trends – COVID-19 was a reminder that the world can change quickly. Customers continue to look for trusted counsel who understand all the potential risks and can offer protection if the worst occurs. Independent agents who understand emerging risks, such as extreme weather, cyber concerns, and workplace safety, will earn customer trust. Agents who regularly communicate trends will find new opportunities to connect with customers while developing stronger relationships and uncovering potential business.
- Leverage technology – Partner with carriers that provide agency staff and their customers omnichannel resources for an enhanced customer experience. Online, web- and mobile-based service tools keep today’s modern customer engaged. Independent agents need access to tools and services that help them compete in a modern world while meeting customer expectations.
- Offer complete coverage – Consumers today need to protect more assets than ever. Independent agents have an opportunity to grow their business by writing the total account for customers. Many agents are having more and more conversations with their clients to discuss life changes and to assess evolving needs. This practice can foster customer loyalty and help an agency expand its business.
- Create meaningful customer touchpoints – Consumers and businesses found new digitally-enabled ways to communicate and stay in touch during pandemic lockdowns, and many are looking for these digital interactions to increase. We typically see ambitious agents encouraging customers to provide multiple points of contact along with their preferred communication channel. Agents quickly learned that digital channels tend to be favored and securing customer email addresses is critical. This information enables savvy agents to have regular customer touchpoints through the right channels and more often. These increased communications build strong customer relationships that last.
- Look for access to a direct underwriting model – Whether agents are at home or in the office, they need to have access to a direct underwriting model that enables them to build their most profitable accounts. By partnering with carriers who offer a direct, local underwriting model, agents can ensure they serve their customers’ needs in an efficient, timely fashion. Underwriting helps with more complicated and complex accounts which enables the most flexibility and choice to tailor the account to limit customer risks.
- Retaining talent – Agents of the future want options for where they work. Employees are looking for continued flexibility that was offered as a result of the pandemic and agencies that offer a combination of in-office and remote working options will experience higher volumes of employee retention. Hybrid models are a tactic for attracting new talent to the industry as prospective employees realize they can experience success from virtually anywhere. Review your benefits to make sure they are in line with industry standards and meet employee expectations.
The Hanover surveyed more than 500 independent insurance agency owners in connection with the report. The company’s goal was to understand the current state of independent insurance agency operations amid the pandemic. To learn more about The Hanover, please click here.