The insurance industry is in the midst of one of the hardest markets ever – thanks to a confluence of high inflation, severe weather, reinsurance constraints and rampant legal system abuse. The Liberty Mutual 2024 Agent-Customer Connection Study revealed that 83% of agents consider this the hardest market they’ve experienced in their careers.
Despite these challenges, many independent agencies are finding ways to fortify their businesses and strengthen their relationships with clients – leveraging the independent agent’s strategic advantages of ease, choice and trusted guidance.
To get a better understanding of how agencies are riding out the hard market successfully, we reached out and asked a few of our 2023 Agent for the Future Award winners for their advice on navigating the hard market. The following five tips are distilled from those interviews.
1. Communicate early and often with customers prior to renewal
To learn more about how agents and customers are experiencing the hard market, read our new report: The Agent-Customer Connection: Gaps and Opportunities in the Hard Market
The 2024 Agent-Customer Connection Study found that customers often first hear about their rate increase from their bill. This can make renewal conversations tricky, leaving agents with a backlog of calls from customers who don’t understand why their rates have gone up.
All of the agents we interviewed agreed that proactive communication, before the customer gets notified of a rate increase in the mail, helps soften the blow and makes renewal conversations go more smoothly.
“We believe in no surprises,” says Zach Sibrel, who focuses primarily on commercial clients in his role as chief revenue officer at WalkerHughes Insurance. “In this market, if we have a large property-driven account, we’re out there at least 120 days in advance letting them know what’s coming.”
While these can be difficult conversations, Sibrel says his clients appreciate the advanced notice, which gives them time to adjust.
Sibrel says he goes into the conversations with information about industry trends and average increases in the client’s industry, to show the reasons behind the rates. After showing that switching carriers is unlikely to save the client money, he then focuses the conversation on opportunities to save with the current carrier.
2. Educate your agents and customers proactively
Liberty Mutual research found that insurance customers want their agents to help them understand not only their specific policies, but also the changing dynamics of the insurance market.
This means that it’s not enough to tell customers to expect increases. You need to educate them on what’s driving rates across the industry. That often starts with educating agency staff first, and then arming them with materials that help them explain the market to policyholders.
Sarah Cooke, director of personal lines at WalkerHughes, collaborated with personal lines manager Todd Curry and members of the WalkerHughes team to create a short video on the hard market that their agents now share with customers prior to renewal conversations.
“The video heads off many of the questions and concerns our agents encounter during these renewal conversations,” says Cooke. “We’ve posted it to our social media pages and included it in our client newsletter, which allows us to track who has viewed it.”
The video lives on WalkerHughes’ YouTube channel, so if a client hasn’t watched it, the agent can send it along prior to a renewal call.
3. Find ways to scale the capacity of your staff
There are a few effective ways to scale staff capacity during the hard market.
Cooke recommends creating email templates and talking points to help staff respond quickly and consistently to customers reaching out about rate increases: “When you’re getting constant inquiries and having to say the same thing over and over, it’s nice to have your responses in a templated format.”
Insurance virtual assistants (IVAS) are another efficient, low-cost option for scaling capacity, able to handle everything from customer service, lead and email management and marketing to billing and policy changes. Contracting with one or more virtual assistants can save an agency a great deal of time and money.
“We currently have 10 virtual assistants on the books,” says Jeff Wingate, executive vice president of national broker Guaranteed Rate Insurance. “With all the work our virtual assistants have taken, our licensed agents now have more time to spend on high-value conversations with our customers.”
4. Take every opportunity to boost employee morale
In this challenging time, it always helps to find ways to boost morale. Cooke recommends fun in-person events. Agency staff recently came together at one of WalkerHughes’ locations for a day of team-building activities, including a Jeopardy-like game Curry devised. They also get together in person for an annual Christmas party and a summer event.
“We have 15 locations spread out across Indiana,” she says. “On-site events give us the opportunity to show we understand what employees are experiencing and express our support.”
Hybrid or online events can also boost morale when convening in-person isn’t convenient. To celebrate its Agent for the Future Award, for instance, the agency organized a “Dip, dip, hooray!” event where everyone brought in their favorite dips to their local offices, then shared the recipes online for the entire company.
5. Be patient. This won’t last forever.
“This is definitely the hardest insurance market I’ve experienced,” says Wingate. “We’re spending much more time with customers at renewal than we have ever done in the past.”
While these conditions are testing the resolve of many agents who are working hard to serve customers, if there’s one thing we know about hard markets, it’s that they eventually end. Agents and agencies that put their heads down and focus on retention will prevail in the long run.
This information was helpful to read and I’ve even saved the hard market video in the event I feel the need to send it to one of my clients.