“ Hard insurance markets are challenging , but they don ' t last forever ," Bills said . “ It ' s with a sense of optimism that I can say — and this research validates — that independent agents are well-positioned to weather this market and come out stronger , more resilient and customer-centric ." •
MARKETPLACE
PROACTIVE EDUCATION CREATES OPPORTUNITIES IN THE HARD MARKET
written by Olivia Overman , IA magazine
Through proactive communication , diversification and investment in their agencies , independent agents are successfully navigating the hard market and laying the groundwork for future growth , according to the “ 2024 Agent-Customer Connection Study ," the latest research by Liberty Mutual and Safeco ' s Agent for the Future .
The report explores how the hard insurance market is impacting both agents and customers , with 83 % of agents saying this is the hardest market they can remember seeing . Also , 89 % of customers said their insurance rates increased in the last year and 21 % said it increased “ significantly ."
Yet , customers don ' t fully understand what ' s causing rate increases , the report said . Only about 20 % of insurance customers say they understand the market forces behind rising insurance rates . Insurance clients want their agents to help them understand , as 62 % said it ' s important for their agent to educate them on the changing market dynamics .
However , while 70 % of independent agents say they are proactively communicating with their clients about market conditions , only 20 % of customers said they first heard about a rate increase from their agent . More than half ( 58 %) said they first learned about the increase when they noticed their bill amount changed .
There is an opportunity for agents to communicate their value as trusted advisors through improving proactive communication . Agents could improve customer satisfaction and retention by adapting their communication strategies , particularly when it comes to customers who have experienced significant rate increases , the report says .
“ Insurance is a relationship business ," said Luke Bills , president of independent agent distribution at Liberty Mutual and Safeco Insurance . “ In a hard market , those relationships have become even more important . We already know that customers rely on their independent agents for advice and expertise on their insurance coverage . But this research goes further to show that today ' s customers are turning to their agent for even more . They want their agent to educate them on changing market conditions , help them better understand policy changes and provide advice on risk mitigation ."
According to the research , forward-thinking agents have stepped up to today ' s challenges , adapting to meet clients ' needs and finding growth opportunities . Agencies that experienced an annual revenue increase of more than 10 % reported three strategies : diversifying and shifting toward markets less impacted by the hard market ; investing in new retention programs to keep existing clients happy ; and positioning themselves for future growth by continuing to invest in new client acquisition programs , as well as hiring additional staff .
Amid the hard market , 65 % of agents say their retention rates are the same or better than they were a year ago , and 69 % say they are acquiring new clients at the same rate or better than the previous year .
“ Hard insurance markets are challenging , but they don ' t last forever ," Bills said . “ It ' s with a sense of optimism that I can say — and this research validates — that independent agents are well-positioned to weather this market and come out stronger , more resilient and customer-centric ." •
Olivia Overman is IA magazine content editor .
26 KANSAS INSURANCE AGENT & BROKER