AGENCY MANAGEMENT process , difficulty placing risks , and customers requesting alternative options . Survey respondents overwhelmingly identified this as their primary challenge at nearly 80 %, outpacing the traditional number one challenge of “ hiring , training , and retaining talent ” by about 25 %.
Narrowing Profitability Margins Narrowing profitability margins is another challenge facing member agencies . Causes for the narrowing margins are being driven by economic and marketplace conditions including increasing employee salaries , less time to focus on new business , and challenges in reaching growth goals which may impact contingency eligibility .
The Talent Challenge Hiring , training , and retaining talent continues to be a challenge for member agents . While the need for employees continues to be an on-going issue for the industry , agents need to be sure to take a wholistic approach to this issue . This includes being open to alternatives to meet their operational needs , including considering a hybrid work environment , utilizing virtual assistants , and implementing technology to streamline workflows . Creating a strong agency culture is critical to attracting talent . Currently , agencies are having to train new employees during one of the most turbulent times in the insurance market ’ s history .
AGENCY TRENDS
Personal Lines and Commercial Lines Remarketing 65 % of agents are re-marketing 25 % or more of their personal lines accounts . About 1 / 3 of respondents are remarketing more than 50 % of accounts . This is being driven by substantial increases in premiums and changes in underwriting appetite , especially around roofs . While agencies are focused on education about market conditions , they are the having to remarket accounts to maintain their book of business . In addition , thresholds in premium increases to remarket accounts are being adjusted upwards . On the commercial lines side , there is less re-marketing of accounts but 45 % of respondents are re-marketing 25 % or more of commercial accounts .
Policy Retention Agencies are working hard to retain their books of business , but how have market conditions impacted policy retention ? Overall , 27 % of principal / owners said policy retention remained flat . However , approximately 43 % of respondents indicated that policy retention was down . 29 % said retention was up . The most common response at 37 % was policy retention was “ down slightly ”.
Customers Reducing Coverage / Going Bare ? Increasing premiums and coverage accessibility , on top of general inflationary pressures , have customers re-evaluating their insurance options . The survey asked if agencies are seeing customers reduce coverage or go bare ? The results were mixed with about half of principals / owners sharing that they are seeing that less than 10 % of the time . However , 46 % said it is happening between 10 % and 30 % of the time and 8 % see it more than 30 %.
Remarketing accounts , stricter underwriting guidelines , changes in valuations methods , and reductions in coverage and limits increase the exposure for E & O claims from potential gaps in coverage . From an E & O risk management perspective , remind agency staff to consider the following :
• Make sure customer information is updated and accurate when remarketing accounts ,
• Document the coverages offered and declined or reductions in limits ,
• Share any changes or limitations when switching insurers ,
• And encourage customers to review their policy language .
Implementing workflows and procedures are critical to avoiding E & O claims and offering an outstanding customer experience .
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