MANAGE & LEAD
BRING VALUE, NOT DONUTS
Discover fundamental elements that will help all partnerships start off strong.
By: Cheryl Koch
Various company representatives have posed the question
for years: just what is it that agents want and need? While
so much has changed in our industry over the years, many
of the fundamentals remain the same. Perhaps this is an
excellent time to stop and consider what is valuable to an
independent agency when it comes to partnering with any
company or another insurance provider.
Consistency
It’s like umpiring a baseball game. Neither team nor the
batters will ever agree with all ball and strike calls, but
once the zone is established, the umpire must apply it
consistently. Agents will never agree with every individual
underwriting decision or changes in the direction the
carrier is taking. Still, so long as the rules and guidelines
are applied consistently, we can live with it. Companies
that come out with a new strategy designed to capture a
particular market segment, convince the agency force to
place a lot of business with them, then exit that market in a
year or two are not partners on whom the agency can rely.
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Pricing consistency is also important. We expect that there
will always be increases and decreases based on market
conditions, loss trends, and other circumstances, but when
the pricing methodology is consistently applied, everyone
benefits. All clients have a budget for insurance, and they
don’t like surprises when it comes to renewal premiums.
A carrier that applies a modest increase each year - to
keep pace with inflation and other underlying costs - is in a
much better position than one that takes prices up a large
percentage one year, then drops them significantly the next
in an attempt to grow market share.
Commitment
Many carriers claim to be staunch supporters of the
independent agency system, but we judge them by their
actions, not their words. If a company sees fit to compete
with its agency force by pursuing alternative distribution
methods, or they fail to promote and support the agency
system, it sends a mixed message to consumers and
agents alike. While we recognize that, to grow, companies