Deloitte, National Underwriter Survey Finds True Partnership among Insurance Carriers, P & C Agents, Brokers Remains Elusive

NEW YORK, November 18, 2009 — The much touted partnership between insurance carriers and their agents and brokers does not facilitate enough open communication and input on strategic business activities, according to a new survey of property and casualty agents and brokers by Deloitte and National Underwriter magazine.

Results of the Producer Satisfaction Survey, released today, found that the more frequently carriers sought input from producers about strategic business activities, the more satisfied the producers are with the carriers.

Yet, the survey indicates that carriers do not routinely seek input from agents and brokers, with only an average of 10 percent of respondents saying they are consulted “often” by carriers on matters including marketing, product development, technology, claims and distribution.

“Carriers need to develop an agent-centric approach that views producers as true business partners in co-creation of value. This may require a change in mindset from the carriers’ perspective, both in terms of seeking agents’ input on business activities and then actually processing and understanding what is important to the agents,” said Rebecca Amoroso, leader of Deloitte’s U.S. Insurance practice.

Amoroso added, “Designing a relationship strategy that will accomplish this, and actively involving agents in strategic business activities, actually offers a true competitive advantage to the carriers that execute first. By creating an ‘agency experience’ similar to the customer experience — and then customizing it to unlock further value — the carrier can fulfill agents’ needs while gleaning the kind of insight that can act as a strategic catalyst for growth at the carrier level.”

Sam Friedman, editor in chief, National Underwriter, stated: “Insurers often talk a good game when it comes to being a partner with the independent agents and brokers who sell their products and services. But, to really walk the walk, carriers must get distributors of all sizes more closely involved with branding, marketing, pricing and service issues, not only for their own mutual benefit, but for the benefit of their clients.”

The July 2009 survey of 1,596 qualified agents and brokers focused on gauging which agency experience attributes, and related products and services, are most important to producers; measuring producer satisfaction; and determining what priorities and concerns producers would concentrate on over the next 12 months. Key findings include:

Agency Experience Attributes

• More than 60 percent of respondents found products and coverage, claims handling and policy pricing very important
• Between 40 and 60 percent of respondents found financial strength, overall relationship and business support, and technology very important
• Less than 40 percent of respondents found compensation in terms of fees and commissions, carrier brand and reputation, and risk and loss control services very important
• 80 percent or more of respondents are satisfied or very satisfied with carrier financial strength, products and coverage, overall relationship and business support, brand and reputation, claims handling and policy pricing; less than 33 percent were very satisfied

Measuring Producer Satisfaction

• 24 percent of respondents from large agencies were consulted by carriers often on marketing initiatives versus 10 percent of respondents from small agencies
• 22 percent of respondents from large agencies were consulted by carriers often on product development versus 6 percent of respondents from small agencies
• Only 7 percent of respondents from large agencies were never consulted by carriers on claims handling versus 30 percent of respondents from small agencies

Producer Priorities and Concerns

• 89 percent of respondents expect existing policy holders to comparison shop
• 79 percent of respondents expect policy holders to assume more risks to reduce their premiums
• 79 percent of respondents expect policy holders to cancel policies due to economic pressures

A copy of the survey is available on National Underwriter’s website at www.property-casualty.com.

About Deloitte

As used in this document, “Deloitte” means Deloitte LLP and Deloitte Services LP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

About National Underwriter

National Underwriter Property & Casualty, published by Summit Business Media, is the only weekly magazine serving the entire property and casualty insurance industry. While primarily focusing on the commercial insurance business, National Underwriter P&C covers critical developments affecting the buyers, sellers and manufacturers of insurance products and related services. National Underwriter has the highest circulation of any magazine covering the P&C insurance market with a total qualified circulation of 75,129 (BPA June 2009 audit statement). More importantly, National Underwriter is a leader in reaching the decision-makers in the three key audience segments – agents/brokers, insurance company executives and corporate risk managers.

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