Having an Independent Agent Matters

1) The independent agency comes from its very independence which is best for the consumer. Independent Agencies are not beholden to public traded companies and the pressures from corporate officers, stockholders, and Wall Street to meet earning projections, quarterly stock dividends and or stockholders. Only the independent agency can alone decide what’s best for the agency’s long-term sustainability; a better posture to serve their client’s needs because they don’t have to worry about quarterly profits to shareholders, and can focus all their energies and dedication to their client’s needs and products.

(2) The independent agency is best distinguished by its “consultative approach” which is what makes us different in the insurance distribution system between captive agents, direct writers, and independent agents. The consultative services approach helps explain coverage in plain clear language to the consumer. Consumers like the “brick and mortar” retail independent agency because it offers a one-to-one client/agent relationship. People want to ensure people they like and trust. The typical consumer has little understanding of the differences between a captive agent, a direct writer and an independent agent in the insurance industry. Only through the Independent Agent can the consultative approach be brought to life.

(3) Although Captive Agent’s & Direct Writers have customer-recognized branding, national advertising, updated technology and customized training; they don’t have a local, trusted voice that consumers truly want. That’s why the independent agent proudly wears the “Trusted Choice” logo. Only through the independent agent can one achieve a local and trusted voice as opposed to a Captive agent or Direct Writer where they are limited in what they can offer and do.
The Independent Agent was cited as the top three choices for who consumers trust most to provide advice about the best insurance policy according to a 2013 Accenture U.S. Personal Lines Consumer Survey considering 66% of respondents.

(4) The media portrays insurance as a commodity where you compare “apples to apples” between
coverages and claim unnecessary policies and ways to eliminate costs. Insurance is not a commodity and coverages, limits, and deductibles can vary from company to company. In fact, certain types of policies are written exclusively by the particular ensuring company and not uniform by all the carriers in their scope of coverages. The slightest change in a single word in the policy wording can result in a) the consumer not being covered, b) the consumer having only limited coverage and c) having full policy benefits. The independent agency system having multiple carriers and knowledge of each carrier’s policy can best explain their differences to the client. Relying on the idea that insurance products are a commodity and that all insurance policies in a particular type are the same can be detrimental to the insured’s well-being and their financial safety in the event of a loss. Only through the Independent Agency and their array of various companies, coverages, and deductibles, can explain the differences to the consumer through their local, trusted voice, and consultative approach.

(5) Even if you could find the same, identical insurance product with identical coverages, there are differences in the service that stands behind that product. And that’s something that we as independent agents have experience with through the many companies that we represent on a daily basis. A direct writer has no other experience, but with their own product. In other words, it’s self-serving. Consumers need to know all aspects of what they are buying and only the independent insurance agency system can provide that diversity.
(6) Consumers who buy from Independent Agents report a higher level of cross- and up-selling behavior (27%) than those buying from a direct, or captive agent (20%) – and 38% of independent agencies reported that leveraging moments of truth generated sales or increased coverage for a client. Only through the Independent Agency where diversity, trust, and the one-to-one client/agent relationship exists generating such favorable statistics over other distribution systems within the insurance industry.

(7) Is having the lowest insurance premium what the word, “competitive” mean? To some consumers, it may suggest having the lowest premium. But the real issue is not about price, but about a value-added proposition that is clearly distinguishable by the client. Having a million dollar coverage limit with a million dollar deductible may have the lowest premium, but the worst coverage, if any. Independent Agents typically focus on local, trust, knowledgeable and well-trained staff and value following the sale. The educated insurance consumers want to know and should know, what coverages, limits and deductibles they are getting for their dollars spent. And this brings us back to the value-added proposition. What is the consumer getting in return for their dollars spent? Only through the independent agent can the consumer fully understand all their options as to companies, the scope of coverages, and value-added possibilities.

(8) 39% of U.S. respondents in an Accenture 2014 survey found that the consumer would be willing to pay more to get personalized advice or assistance when buying insurance and 76% said that the consumer would consider switching to a different producer in order to get more personalized service, according to Accenture’s 2013 Consumer Driven Information Survey. People want to ensure people they like and trust. Only the Independent agent offers this opportunity through a local, trusted voice, diversity, knowledge, and value-added options that the above statistics collaborate.

(9) Some companies are reducing their coverages to lower the premium. As long as consumers are led to believe that all coverages are the same, and they’re not, they won’t know. Only the independent agent having an understanding of each of their various company guidelines, limitations and coverages can benefit the consumer on purchasing the right insurance for them through their diversity and consultative approach.

(10) Direct writers and Captive Agent’s are beholden to their employers for their job security by being dedicated to their employer first instead of the client. They are domicile to one company entity that pays their salary as opposed to the Independent Agency system where Agent’s are beholden to their client’s first with their array of various companies to choose from. Only the Independent Insurance Agency system can give the consumer the freedom of choice of company, freedom to know the different service quality levels, and freedom to understand the differences in coverages among various carriers selling the same type of product. Only the Independent Agent can offer this kind of diversity to the public.

What do you think the consumer loses by not using an independent insurance agency?

Leigh B. Needelman

President-Elect 2017-2018