The bad news, of course, is that agents and brokers have had to deal with a lot of angry and confused clients as premiums for auto and homeowners insurance have soared. "If you talk to any agent right now who has been in the industry for 20-plus years, they're saying that this has been the most challenging market they have ever seen," said Kasey Connors, vice president of marketing operations at the Independent Insurance Agents & Brokers Association.
The good news? "There is a light at the end of the tunnel," she said, and "if we can make it through this, we can make it through anything."
I spoke to Connors for this month's interview because of a consumer survey the IIABA released in December that found a startling number of people considering changing carriers in the face of surging rates or even dropping coverage, despite legal requirements for auto insurance and contractual requirements for homeowners insurance for anyone carrying a mortgage.
She said those trends are continuing but added that many agents and brokers have made headway with clients by communicating extensively with clients. Agents and brokers are helping them understand the numerous economic factors, including soaring costs for parts and labor and the surge in the number and severity of natural catastrophes, that are forcing premiums higher. Many customers are also learning from agents and brokers about how to save money by choosing higher deductibles, she said.
In any case, inflation has dropped, and prices have even declined for some materials and parts. J.D. Power predicts that used car prices will drop 5.7% in the U.S. this year, after skyrocketing during the supply chain disruptions that the pandemic produced. So some of the pricing pressures are abating.
In a follow-up survey, agents reported having success in this still-tumultuous market by emphasizing four areas: communication with clients and partners; technology to improve efficiency; remarketing; and team morale.
Elaborating on the need to improve efficiency, Connors said, "Our survey found that almost 80% of agencies are getting more phone calls, so demands on staff are increasing." In terms of boosting morale, she said, "We found that at least 30% to 40% of agencies were implementing additional staff training."
Connors added: "Agencies that are looking at improving their business processes are being the most successful."
So a bit of a mixed bag from the IIABA research, and there's plenty of work ahead of us. But for the first time in a while that light at the end of the tunnel seems to show an opening ahead for agents and brokers and isn't the headlight of an oncoming train.
Cheers,
Paul
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