Independent agents have high insurer satisfaction despite market challenges, study finds

Despite one of the most challenging markets in history, independent insurance agents are nevertheless more satisfied than ever with insurers, according to a new survey. Rising rates, insurer exits, frustrated consumers, and difficulties have created a tumultuous market. Yet agent satisfaction with insurance companies has been robust, particularly in the commercial lines sector.

This finding comes J.D. Power’s 2024 U.S. Independent Agent Satisfaction Study, which highlights areas where insurers have successfully supported independent agents, including improved quoting platforms, enhanced training, and agent incentives.

“In the backdrop of all the difficulties happening – with consumers looking for lower premiums while insurers are raising rates – the fact that agent satisfaction with insurers and personal lines relationships held steady year over year is quite surprising,” said Stephen Crewdson, senior director of insurance business intelligence at J.D. Power.

The annual study, developed in collaboration with the Independent Insurance Agents & Brokers of America, assesses how well insurers are meeting the evolving needs of independent agents in the U.S. property and casualty insurance market. It gives a comprehensive look into agent satisfaction with both personal and commercial lines insurers, while also exploring the agents' roles, their challenges, and the strategies carriers employ to foster strong relationships.

A significant milestone

The study revealed a significant milestone in agent satisfaction with commercial lines insurers, with a record-breaking score of 781 on a 1,000-point scale. This marks a 19-point increase from 2023. In comparison, satisfaction with personal lines insurers remained flat, scoring 774, consistent with the previous year.

“For the first time ever, agents are more satisfied with insurers in their commercial lines relationships than they are in their personal lines relationships,” Crewdson said. “It's never been the case in the study. This is the first year that has happened.”

This surge in commercial lines satisfaction, he said, shows the growing importance of these relationships as agents contend with stricter underwriting requirements and fewer qualified clients. While the market is crowded with significant challenges, insurers that offer enhanced tools and support have been able to strengthen their partnerships with agents.

“What the data are showing is that agents are saying in the personal lines relationships, it's becoming harder to work with the carrier,” Crewdson said. “So, they're putting a lot more effort into working with the insurer. That shows up in a couple of questions.”

He said carriers that recognize the challenges independent agents are facing—and help them navigate those obstacles through a combination of education, easy access to quoting tools, and incentives—are managing to earn agent loyalty and satisfaction despite the tough market.

Underwriting standards more stringent

Agents are meeting more stringent underwriting standards, which limit the number of clients who qualify for coverage. This tightening of the market is also making their jobs more difficult, especially as they work to balance client expectations with the realities of insurer demands.

According to the study, agents are finding that working with insurers now requires more effort, with reduced flexibility in the client onboarding process across both personal and commercial lines.

In response to these challenges, many independent agents are increasingly proactive in shopping for better rates and coverage options on behalf of their clients. The study found that 54% of commercial lines agents and 62% of personal lines agents report shopping ahead for their clients more often than they did two years ago. This shift reflects a growing trend in the insurance industry, as agents look to provide their clients with the best workable solutions in a market characterized by rising premiums and limited coverage options.

“We went from 29% of agents in personal lines relationships last year saying they had to put in a high amount of effort to work with the insurer,” Crewdson said. “That went up to 34% this year. So, I think one of the themes that we're seeing in the data is it’s just harder for agents to work with insurers. They're a little bit less likely to say that the carrier is being flexible.”

Keeping independent agent loyalty

As agents work harder to secure favorable policies for their clients, they rely heavily on the insurers that can offer them the best support. Those insurers that streamline the quoting process, offer clear communication during claims handling, and provide ongoing educational resources are the ones keeping agent loyalty.

The study identified several factors that set high-performing insurers apart in the eyes of independent agents. Chief among these are improved quoting platforms, which have made it easier for agents to start new quotes and onboard clients. Insurers that invest in technology and simplify the quoting process are giving agents the tools they need to work more efficiently, despite market difficulties.

Additionally, insurers that prioritize communication—particularly during the claims process—and offer opportunities for agent education and career development are fostering stronger relationships. Incentive programs, such as cash rewards, trips, and prizes, have also played a role in keeping agents engaged and loyal to certain insurers.

The J.D. Power study ranked insurers based on agent satisfaction across both personal and commercial lines. In personal lines, Erie Insurance claimed the top spot with a score of 862. Auto-Owners Insurance followed closely with a score of 845, while The Hanover ranked third with 800.

In the commercial lines category, Auto-Owners Insurance kept its lead for the fourth consecutive year, earning a score of 844. The Hartford and Zurich took second and third place, scoring 815 and 801, respectively. These rankings underscore the importance of a comprehensive approach to agent relationships, from quoting and communication to incentives and support.

The J.D. Power 2024 U.S. Independent Agent Satisfaction Study is based on 4,918 evaluations of personal and commercial lines insurers, with responses collected from May to August 2024.

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Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].