Agents selling personal lines insurance factor in the frequency of the insurer’s key contact, their compensation and the marketing money they receive from a carrier in deciding where to place business.

Kara Steslicki

“They are important parts of the relationship for the agent,” said Kara Steslicki, senior research manager with J.D. Power and Associates and the author of the second annual J.D. Power and Associates 2010 Insurance Agency Satisfaction Study. The study explored the satisfaction of personal lines agencies with their carriers.

Agent satisfaction with compensation, an important component of the insurer-agent relationship, has increased to 671, up from 628 in last year’s study. (The numbers are based on 1,000 being complete satisfaction.) Agents said commissions and cash rewards are the types of incentives that best motivate behavior at their agency.

At the same time, fewer agents report being offered marketing dollars – just 23%, compared with 43% last year. Satisfaction is higher among those offered marketing dollars (an average satisfaction level of 751), compared with 698 among those who were not offered marketing dollars.

“Any money they are receiving, they are happy with,” Steslicki said, explaining the research. “A little bit will help is a theme we are seeing.”

Contact is key

Interaction with the key contact from the carrier also influences how they place business, the research showed. Agents indicated that they want their insurers to contact them regarding business operations up to five times a month, by email, phone and in person. Agents found the most satisfaction with up to 10 email contacts a month, while one on-site visit and one telephone call a month was enough, they told researchers.

“The phone, to most agents, was more intrusive,” Steslicki said, noting that these contacts involved the insurer’s key contact with the business to address marketing and sales issues primarily, and not day-to-day issues.

The study found that, on average, there is more than a 150-point gap in agency satisfaction between insurers who receive 5% or less of an agency’s business and those who receive more than 60% of an agency’s business (661 vs. 821, on a 1,000-point scale).

Also, three-quarters (77%) of highly satisfied agents (satisfaction higher than 950 points) say they intend to increase business with an insurer, while just 24% of less-satisfied agents (satisfaction of 600 points or less) say the same.

This story originally appeared in the April 2010 print edition of Insurance & Financial Advisor.