By Dave Lenckus, contributingwriter

What contributes to a good relationship between agents andinsurers sometimes is easy to agree upon. But the basis of a strongrelationship typically is more complex than just good products,stability and meeting production goals. Each party also has its ownspecific needs and desires, such as the high-quality service andcompetitive products that top many producers' must-have lists andthe business volume and integrity requirements that many insurersdemand. Plus, everyone's priority list is a little different, andall have their own strengths and weaknesses.

AA&B spoke with both sides to examine what is important to each and why. What follows aresome real-life stories of relationships that, while complicated,are an unqualified success.

Click here to see the results of AA&B'sagent/insurer relationship survey.

The Agencies

Steve Dunlap
agent
Steve R. Dunlap Insurance Agency
Tucson, Ariz.

No longer willing to suffer the arthritic shoulder pain thatgrocery store coolers were causing to flare, Steve Dunlap left his20-year career as a meat manager in 1995 and became an insuranceagent.

While these careers have been vastly different, Dunlap, 57,observed that they share an important similarity: Customer serviceis critical for success.

Dunlap's business is 90 percent personal and 10 percentcommercial, and he places 99 percent of it with Farmers Insurance.As an added service, he taps other insurers for clients who needhealth care coverage or special automobile insurance for car tripsinto Mexico.

Dunlap is all about client service, which includes makingclients feel comfortable with him–an “everyman's guy” whounderstands their needs. That's why at his own agency he takes thetitle of agent rather than president or principal.

Customer service is the root of his relationship with Farmers aswell.

Dunlap recounted a case that typifies the insurer's claimshandling. A client's home burned to the ground in the early morninghours on a Saturday, and Farmers delivered a full policy-limitscheck to the homeowner five days later, only three of them businessdays.

Sidebar: Wants and needs

“They've always been good in handling claims,” Dunlap said. “Itruly believe in the company.”

Farmers helps Dunlap deliver his goal of the best customerservice easier to achieve in other ways, too. Informationtechnology updates over the past year or two now allow potentialclients to apply for coverage online, permit clients to paypremiums over the phone using a credit card, and enable Dunlap toproduce a slick proposal detailing the cost of home, auto and lifecoverages on a single sheet.

Farmers does not advertise heavily on television, but itadvertises at the University of Arizona's various sports arenas. Italso provides client leads, and sends out mailings with agents'input. Farmers sometimes also partially subsidizes the cost of adsthat agents want to place.

In addition, the insurer supports charitable events in thecommunity, tying in its agents with that community support.

For all the help Farmers provides its agents, the insurer doesnot get every initiative 100 percent correct from the start, but itanticipates that might happen, Dunlap said. The insurer routinelysurveys its agents about how a new or an existing initiative isworking and how it might be improved. After receiving agents'feedback and then making adjustments, Farmers surveys agentsagain.

“They're constantly trying to improve,” he said.

Doug Spencer
independent agent
Doug Spencer Insurance Agency
Morgan Hill, Calif.

To Doug Spencer, who became an independent property-casualtyagent 3 years ago after 5 years as a captive life agent, theinsurer that writes the largest portion of his business isattractive for some practical and intangible reasons.

Spencer, who produces about $1.1 million in annual grosspremiums, places about half of his business with Fidelity NationalProperty & Casualty Insurance Group, a division of FidelityNational Financial Inc. Fidelity is a well-recognized brand name,it has a good claims-payment reputation, and the company isimproving its information technology, Spencer said.

Sidebar: Project to thaw technology chill

Another significant factor for Spencer is the friendliness ofFidelity's personnel. Some bigger agency companies are not asfriendly, he observed. “You're going to work better for people youlike,” he added.

Spencer, 58, began his career as a chemist for Dow Chemical Co.in Pittsburgh and later became a manufacturer's representative fora housewares company. He became a life agent for MSI Insurance Cos.in 2002 after he was presented with an opportunity to own an agencyand assessed that insurance is a “very secure form of income,”especially if client retention is strong.

Today, he places property-casualty coverage–80 percent personaland 20 percent commercial–with about 20 companies, although a halfdozen insurers, led by Fidelity, write most of his accounts.

Although in the past Fidelity has lagged in technology andcommunication tools, the insurer has made significant strides inrecent years, he said.

For example, Fidelity has streamlined its automobilepolicyholder questionnaires. California law requires insurers toobtain certain information from policyholders, but the previouslonger form, combined with a high rate of foreign-born individualsamong Spencer's client base, led to only a 50 percent responserate. Spencer couldn't offer the most competitive pricing withoutresponses, which hurt client retention.

Asa Jones
managing member and majority owner,
GIA Group LLC
Glenwood Springs, Colo.

Asa Jones and his family have been in the insurance business fordecades, beginning with the agency his father opened and hisbrother now runs in Buffalo, Wyo. Another brother gave Jones hisfirst job out of college at an insurer.

Eleven years later, in 1982, Jones moved to the agency side ofthe business. GIA has four locations in Western states, with Jonesmanaging Glenwood Insurance Agency in Glenwood Springs, Colo. GIAgenerates about $89 million of premium volume, split evenly betweencommercial and personal lines.

Through the generations, there have been some big changes inrunning an agency, including real-time automation capabilities. Andthe insurers that write a significant portion of GIA's businesshave kept on top of that, making them user-friendly businesspartners, Jones said.

But some things don't change. To Jones, the best part of hisagency's relationship with the insurers it turns to most–Travelers,Colorado Casualty and The Hartford–can be summed up in three words:products, marketing and underwriting.

Jones said the insurers' products are “tremendous,” theirmarketing personnel “outstanding” and their underwriters“consistent.” It all coalesces into a “good relationship,” he said,adding that without insurers' assistance, “you can't meetgoals.”

Jason Krouse
vice president of specialized markets
UniversWorkplace Solutions
Hammonton, N.J.

A strong agency/insurer relationship depends on good people,products and systems, according to Jason Krouse. “You can't haveone of them without the others” and still make the relationshipwork, he said.

Voluntary benefits insurer AFLAC is an insurer that understandsthat dynamic and has been working on strengthening its relationshipwith agents outside of the insurer's direct sales force, Krousesaid.

AFLAC has “top-notch people” who are problem solvers, saidKrouse, who joined Univers, a leading benefits enrollment company,3 years ago. The insurer's underwriting team works closely withUnivers and its clients to develop products that are very wellreceived by employees, he said.

In addition, AFLAC, which historically grew its business throughdirect sales, has made a concerted effort recently to supportindependent agents, he said. The insurer has done “a tremendousjob” over the past 1.5 years preventing conflicts between itsdirect sales force and independent agents, he said. The insurer haslimited where direct sales representatives can market and hasdeveloped “do not call lists” to prevent its two distributionforces from “banging heads” over certain potential clients, hesaid.

“Our agents have seen the difference,” and the impact on theagency/insurer relationship has been positive. Now, there's afeeling of them as a partner,” Krouse said. “It gives you a senseof unity and working for the common good.”

AFLAC also has made significant investments in recent years thathave shored up its products and systems. Most notably, the 2009acquisition of Continental American Insurance Co. beefed up bothAFLAC's product mix and systems capabilities, Krouse said.

The Insurers

Chubb Group of Insurance Cos.
Strong insurer/agency relationships are built with bricks ofprofitable and growing business volume on a foundation of agencycompetency and integrity, according to Keith Smith, branch managerfor Chubb Group's Chicagoregion.

But Chubb does not leave the brickwork solely to producers, whoface a doubly tough time during a down economy and a soft insurancemarket.

Noting that Chubb is selective in its agency appointments andseeks long-term relationships, Smith said: “That long relationshipgives us the capacity to do more planning (with agencies), whichleads to better results for both parties.”

Chubb has appointed approximately 300 agents producers in itsChicago region, which extends into Wisconsin and Michigan.

The insurer has developed an agency planning program for its 15or so major independent producers outside of the largest nationalbrokers.

For each producer, the insurer's underwriting team draws up aplan covering tactics; goals, including retaining particularlyvalued accounts; and servicing issues. Producers provide theirinput to create “a living document.”

That meeting is followed up with a mid-year review to examinewhether Chubb and the agent have done what each agreed to do duringtheir initial planning session.

For smaller agents and brokers, Chubb produces scaled-backplans.

The insurer also has committed to providing agents with ongoingeducation and training, including management leadership, producerdevelopment, ethics, sales and insurance training for youngproducers and Lotus Notes training.

Refining its information technology also is helping agentsoperate more efficiently. For example, Chubb recently expanded itsonline commercial inland marine system, which allows agents toobtain quotes and bind and issue policies. Chubb broadened itsonline underwriting parameters so agents and brokers can processmore inland marine online.

Chubb's real-time downloading capabilities are also available ona companywide basis to 90 percent of its agents. Chubb agents thisyear are on pace to exceed the 250,000 inquiries on billing, claimsand policies they handled last year through real-timeprocessing.

Colorado Casualty Insurance Co.
During the persistent tough economy, Colorado Casualty Insurance Co. finds “it necessary to get evencloser to agents,” said Keith Braxton, president and chiefexecutive officer of the Centennial, Colo.-based insurer.

The insurer writes small and mid-sized commercial businessthrough about 600 independent agents in Colorado, Arizona, Nevada,New Mexico, Utah and Wyoming. Each agent, on average, has twolocations.

Colorado Casualty is part of Liberty Mutual Group, but Braxtonnoted that company decisions are made locally. “Agents like talkingto decision makers,” he said.

Although the strength of the insurer/agency relationship dependson the profitability of the agency's book of business, insurersmust also understand and support what makes an agency work well,Braxton asserted. Colorado Casualty does that in various ways, hesaid.

Understanding that agents typically are individuals who “aren'tshy to voice their opinion,” the insurer recently created a website“to promote an ongoing dialogue” about the insurer and themarketplace. Although an occasional agent comment can be“inflammatory,” all feedback is positive because it directs theinsurer on how to address a concern “before it becomes a biggerproblem.”

The insurer also offers its agents real-time andstraight-through processing capabilities, electronic funds transfercapability, which policyholders appreciate for its ease in makingpremium payments; and online agent training.

In addition, the insurer will analyze its agencies' Web sitesfor ways to redesign them to improve their marketing impact.

Colorado Casualty devotes a lot of its attention to marketing,including helping agents through co-branding and providing leads.Following Liberty Mutual Group's acquisition of Safeco Corp. twoyears ago, Colorado Casualty and other members of the LibertyMutual Agency Markets business unit have benefited from the Safecomarketing team's savvy, Braxton said.

In August, the insurer introduced its “Bricks & Clicks” tohelp agents market online. “We want to help them take the mysteryout of online marketing and provide practical steps to grow theirbusiness through enhancing their website
presence as well as through the use of social media,” Braxtonexplained. “Agents can boost leads and drive sales in this channel,and we can assist them in creating an online marketing plan thatbuilds social media presence and improves brand familiarity andloyalty.”

Other ways the insurer attempts to help agents–and itself–is bydeveloping a mutually agreeable business plan for each agency forthe year ahead and providing agency managers a toolkit to help themcultivate talent and develop an agency succession plan.

American Family Life Assurance ofColumbus–AFLAC
More than a year before Congress passed sweeping health careinsurance reform, AFLAC began implementing measures designed toimprove its relationship with independent agents and brokers.

And they're working, according to Ron Agypt, vice president ofmarket development and broker sales, U.S.. A December 2009 studyconducted by Personified, a CareerBuilder.com company, showed thatthe changes have significantly boosted agents' and brokers'perception of AFLAC.

In January 2009, AFLAC rolled out an independent brokerinitiative which:

o Gives agents and brokers a single point of contact. AFLAC nowhas 100 carrier representatives and 17 VPs throughout the UnitedStates

o Adds telephone and Internet enrollment options

o Provides producer “value adds” such as technology upgradesthat allow benefit enrollment through one of five systems, whichminimize system handshake problems between producers and theinsurer

o Standardizes and enhances commissions throughout the U.S.

With its acquisition of Continental American Insurance Co. lastOctober, AFLAC added eight group products to its lineup of 19individual products.

More modifications could be on the way if agents and brokerspress a case for them in a forum AFLAC has created to solicit theirinput. The insurer has convened its 12- to 16-member nationalbroker advisory council four times during the past 24 months fortwo days each meeting to seek producer input and review of companydevelopments, Agypt said. AFLAC follows up with them later abouthow the company is handling the problems they identified.

AFLAC also encourages state advisory councils, Agypt said: “Tome, that's the most important feedback you can get. They'll tellyou what they need to offer to clients.”

AFLAC representatives also attend various broker forums, showsand conferences across the country, he said.

One other factor that should solidify the relationship betweenAFLAC and its producers and their clients: “We celebrate payingclaims,” which is the insurer's culture, noting that AFLAC works topay claims within four days of submission.

Click here to see the results of AA&B'sagent/insurer relationship survey.

Sidebar: Project to thaw technology chill

Sidebar: Wants and needs