Yesterday J.D. Power and Associates came out with an interesting study of what independent insurance agents want in a carrier. The inaugural study was based on input from trade associations like PCI and IIABA, and more than 10 of the biggie insurers, including AIG, Allied, Chubb, Erie and others — in short, they wanted to know what drives agents to deal with a given insurer.

Although the study dealt strictly with personal lines, it paints a clear picture of what carriers can do to make it easier for agents to do business with them.

The results? In measuring agent satisfaction across six factors, the top three drivers were:

* Key carrier contacts (32 percent)
* Policy offerings (23 percent) and
* Claims (16 percent).

I spoke with Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates (and I’ll be posting an interview with him on our Web site shortly), who discussed some of the other findings.

At a time when we’re coming out of years of cutthroat competition, it’s interesting to see that compensation played a fairly minor role in agents’ decisions to deal with a carrier: Only 5 percent of the more than 1,500 respondents ranked it as a critical factor. However, technology and price were among the six leading factors, at 13 percent and 16 percent, respectively.

The low status of compensation wasn’t the only surprise, Bowler said. In spite of the fact that the survey was conducted in November 2008, with the AIG bailout still fresh in their minds, respondents ranked AIG about in the middle for overall agency satisfaction.

And while products and price were important factors, Bowler agreed that the survey results sent out a loud-and-clear message about the importance of the relationships between the carrier and the agency.

“Personal contact is important, for example, the person who is the key liaison on underwriting is the carrier representative that the agent is dealing with,” he said. “If those folks are not accessible, and supportive and helpful by giving the right answers quickly, the agents will struggle to compete.”

And while technology is important, technology alone is not the silver bullet for agency/carrier relationships. “Some carriers do well on technology, but fall down from the people standpoint,” Bowler said. “A typical agency is appointed to 7 or 8 companies. If all the companies are passing out information but have modest training, the last thing an agency needs is to have to go through an extra process to understand the tools of the trade.”

Interestingly, the J.D. Power study seemed to echo some of the findings of the Big I’s 2008 Agency Universe Study, in which 72 percent of respondents expressed overall satisfaction with their personal lines carriers. The Big I respondents ranked “making it easy for CSRs to write business,” “smooth quoting system” and “reputation with customer/prospects” as the three most improved areas for personal lines carriers — all areas that overlap with the J.D. Power driving factors.

Bowler indicated that J.D. Power was planning on conducting a similar agent survey for commercial lines. They’re a great barometer for insurers to use in fine-tuning their relationships with their distribution forces.

What are the most important satisfaction factors in your carrier relationships? Take a survey on our Web page at:

http://www.agentandbroker.com/ME2/dirsect.asp?sid=E2D3EF32475B4172A42FEE249B241FD4&nm=%3Cb%3E%3Cfont+color%3D%22%23c00000%22%3E+%3E%3C%2Ffont%3E+Take+the+%3Cfont+color%3D%22%23c00000%22%3ESurvey%3C%2Ffont%3E%3C%2Fb%3E

Insurance is a service industry in a global service economy — which means our customer service skills had better be top notch. But just how good are they?

Earlier this month, CFI Group came out with its second annual Contact Center Satisfaction Index (CCSI), a survey that measures customer satisfaction with call centers in eight industries, including insurance.

Although overall customer satisfaction with call centers gained 3 percent to a score of 72 out of 100, one in five customers end their contact center experience with unresolved problems, leaving them twice as likely to defect to another.

The satisfaction rating for insurance call centers was a bit higher at 75 percent — up from 68 percent in 2007 — as were overall scores for insurance CSRs at 80 percent (from 77 percent in 2007). These scores measure courteousness, interest in helping the customer, speaking in an understandable manner (well, as understandable as you can get with insurance), knowledge and effectiveness in handling an issue.

Impressive? For the most part, yes — although insurance CSRs’ “hard skills” of actually resolving a customer’s issue was only 73 percent, compared with 87 percent for retail CSRs and 81 percent for banks.

What does this mean for your agency? Plenty, if you rely on CSRs for cross-selling your customers in this tough economy. The survey shows that 42 percent of insurance customers relied on call centers to place an order or check on an order’s status, up from 35 percent in 2007.

According to the report, “Self-service as a business model appears to be slow-coming to this industry. The nature of this particular service and the complexity of different insurance plans and rate schedules force some customers to seek personalized human intervention, in the form of a contact center and a CSR.”

Smart insurers and the agents and brokers who represent them already understand the importance of CSRs in this or any other economy or market cycle.

What’s your agency doing to recruit, train, educate and compensate your CSRs?

Eliot Spitzer’s star has risen and set, but his legacy lives on, at least when it comes to the issue of contingent commissions in the insurance industry.

This week, New York Insurance Superintendent Eric Dinallo and AG Andrew Cuomo started hearings in Buffalo on broker compensation, with two more hearings scheduled for later this month in Albany and Manhattan.

First out of the box to testify was Willis CEO Don Bailey, who stated that contingent commissions should be gradually phased out, with full transparency mandated for all insurance brokers.

Back in the day, agents and brokers relied on contingent commissions as a way to bolster revenue losses after carriers cut regular commissions because of inflation. Over the years, though, contingent commissions have developed an unsavory reputation because of the unfortunate misconduct of the sneaky and the greedy.

Insurers have defended the practice, saying that everyone in any form of sales is entitled to some form of commissions, and that the practice is ethical as long as the buyer is informed of the arrangement and that transparency is maintained. In a lot of cases, compliance involved a lot of voluminous paperwork and red tape, for both the carrier and the producer.

The question remains, what does all this mean to the actual insurance customer? Some say that insureds aren’t aware of the arrangement or if they are, really don’t care all that much, as long as they get the coverage they need at a fair and competitive price.

I’d like to throw the question out to AAB readers: What’s been your experience with coaching your customers about the contingent commission issue — and do they care? And how much of a hit will your agency revenues take if they’re phased out entirely?

Please feel free to share your thoughts!