Agency Consulting Group, Inc. is a charter member of the Quality Insurance Congress. QIC is a commercial P&C insurance association made up of broker/agents, carrier/reinsurers, TPAs and risk managers. The purpose of this association is to get every constituent of our industry focused on IMPROVEMENT. Without industry wide improvement efforts, the industry will continue to be susceptible to alternative markets, alternative distribution channels and competition from non-insurance entities. It is time the industry has taken charge of its future by proactively addressing long standing industry business problems. This is what The QIC is sponsoring.
The 1999 Quality Scorecard, a product of QIC and RIMS, conducted by the Katie School of Insurance at Illinois State University has just been published. Executive Summaries are available from The QIC, 2525 Perimeter Place Dr., Suite 120, Nashville, TN, 37214, 800-445-3433 (website http://www.theqic.org)
We would like to share the results of the Scorecard as they apply to brokers and agents.
THE GOOD NEWS – is that brokers/agents ranked higher than carriers or TPAs in the three major categories, Performance, Satisfaction, and Loyalty.
THE BAD NEWS – is that the scores for agents were still rather mediocre (74% Performance Rating, 70% Satisfaction Rating, and 74% Loyalty Rating).
WHAT DOES THIS MEAN? – These results indicate that, while better than the evaluations of carriers and TPAs, agents need to better understand what drives customers to high satisfaction levels and to change our ways of doing business to meet the requirements of our clients.
1. The MOST important driver for customer satisfaction is the ability of agents to “build internal and external partnerships”. The components of this satisfaction driver are:
a. Negotiating and assisting in negotiations with carriers,
b. Identifying and managing conflicts of interest,
c. Being a part of a team developing client solutions
d. Developing a long-term partnership with the client
e. Dealing with one uniform company
The overall rating for this driver was 76%
2. Trust and Reliability was ranked as second most important driver by the customers. This category involved;
a. high ethical standards,
b. provides trustworthy advice and counsel,
c. CONSISTENTLY fulfills commitments and promises, and
d. Provides full disclosure
3. The third most important issue to the customer was Two Way Communications. This involved;
a. Actively listening and understanding the customer’s business,
b. Communicating effectively,
c. Meets with the customer to review coverage and policies, and
d. KEEPING THE CUSTOMER INFORMED
4. Another driver ranked as important to the customer was Identifying Needs and Creating Solutions. Included as components of this driver were;
a. Accurately evaluating exposures,
b. Responding to the customer’s needs,
c. Offering both insurance and non-insurance options,
d. Providing innovative solutions,
e. Providing solutions that match the needs, and
f. Offering effective risk management solutions.
Equally important to the results of this study is what the customers did NOT think critically important to their satisfaction. “Developing and Providing Expertise” and “Operational Efficiency and Competitiveness” did not rank high with most customers in the creation of performance, satisfaction and loyalty to their agent or broker.
In its simplest terms, customers are more reliant on the relationship issues with their agent or broker than they are in the insurance issues. For the most part the customer ASSUMES competence, expertise and operating efficiency from their agent. If any of these components is not there, you have not met the client’s “Must Haves” and will lose the account. However, whether or not those base components are present, if you have not built a strong partnership, trust and communications relationship with the client, he will remain less than satisfied with you and will be open to competitive quotes and offers from other agents and brokers.
Now you know how the clients feel in general terms. What are you going to do about it?
_____ Nothing – this is interesting but it doesn’t apply to me
_____ I will identify my top clients and invest in relationship building exercises supporting the already excellent products and service we provide.
_____ I will incorporate the key issues found in these studies into my Strategic Plan to attract new clients by tuning into their satisfaction drivers, instead of strictly appealing to the price issues (as do all the rest of the “lemmings” in our industry).
_____ I will contact and join The QIC (nominal annual dues) to become a part of the solution instead of remaining a part of the problem.