Insurance carriers and independent agents work together but often don’t understand each other’s viewpoint. However, without their partnership neither would be able to be successful. This is especially true in the complex world of cybersecurity and identity management where both have a mutual goal of keeping their systems secure and their customers’ information private.
Three things carriers wish agents knew
- It is difficult for carriers to prioritize agency requests as they are often different and sometimes even completely opposite. Consolidating input and building consistency across agencies makes it easier for a carrier to understand and build plans. And hopefully this process of building cohesive input also elevates the highest pain points or those with the most impact. Showing value helps with prioritization in an environment of scarce resources — both funding and human capital. Planning cycles to obtain resources often start six to 12 months before any action is taken.
- Investing in a solution presupposes an expectation of adoption and benefit. When a carrier builds a component or implements a new process, the outcome is evaluated against expected results. Technology is not a once-and-done investment. Everything created has an ongoing cost for the carrier. And many solutions also have an integration cost that is greater the more places it touches (for example, multiple policy administration systems). High agent adoption will maintain and may even add functionality to the investment.
- ‘Free for agents’ may mean that the agent does not pay, but it does not mean there is no cost for agents. For carriers, expense translates directly into the premiums charged to customers. If the cost for carriers, in supporting independent agents, is higher, it will be reflected in higher premium costs that may not be as competitive as premiums in other insurance channels. Higher expenses without corresponding benefits will translate into higher premium costs at some point in the insurance life cycle. For example, the average cyber premium increase of 27.5% was attributed to increased claims in The Council of Insurance Agents & Brokers’ Commercial Property/Casualty Q1 2022 Market Report.
Three things agents wish carriers knew
- On average, an agency has appointments with nine standard personal lines carriers and seven standard commercial lines carriers. Every one of those carriers has at least one portal and sometimes different portals for each specific line of business. Consistent industry practices make independent agents operate much more efficiently. Integration with a single agency management system drives consistency. The advantage of the independent agency channel is choice, but that is also the channel’s impediment, with disparate procedures adding to expense. Anything carriers can do to standardize — specifically, a common authentication so agents don’t have to enter IDs and passwords for every carrier portal — makes the channel more competitive.
- Agencies take care of their own system security first. When a producer leaves an agency, their agency management system credentials are deleted, usually within minutes of their departure. It takes longer — sometimes minutes, sometimes days — to remove the 17-plus carrier portal IDs and passwords the average producer uses. If access to carrier portals is restricted through an agency’s management system, the carrier will also receive the immediate benefit of credential deprovisioning.
- More than half of agencies see dealing with multiple carrier interfaces as a top technological challenge, reported the Big “I” in its 2018 Agency Universe Study. As each carrier implements a proprietary multi-factor authentication (MFA) solution for its portal, the access carrier interface will become even more challenging. The Big “I” also reported in the same study that more than half of agencies see a need for their own cyber liability policy. As more cyber policies require MFA as a condition for coverage, agents will implement their own MFA solutions — maybe in combination with their management systems — and carriers that support a common MFA solution will be easier to work with.