PERSONABLE INSURANCE NON-STANDARD AUTO INDEPENDENT AGENCY TRENDS REPORT

Transcription

1 PERSONABLE INSURANCE NON-STANDARD AUTO INDEPENDENT AGENCY TRENDS REPORT JANUARY 2014

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3 q INTRODUCTION Welcome to the January 2014 Personable Insurance Non-Standard Auto Independent Agency Trends Report. The information contained in this report has been compiled from the responses of hundreds of non-standard auto professionals across the country. As the number of respondents grows, we are able to provide our industry with even more current and credible data. We encourage your continued participation in future surveys, as this report is intended for you, and will only get better with your input. Once again, our goal is simple: To provide a unique and highly credible source of actionable information that will allow you to stay current on the most relevant trends in the non-standard auto independent agency space and also help you manage your business more effectively. Before we provide the findings, here are a few things to remember about our most recent surveys and the results we include in our reports: 1. Two separate surveys were conducted online, each focusing on a different industry topic and each with a unique set of respondents. 2. Respondents as a whole consist of independent insurance professionals that focus primarily on selling non-standard auto insurance. 3. This report does not represent the views of all industry participants, but of those agents who chose to respond to our surveys. 4. All survey responses were collected anonymously and all data / results presented are depersonalized and twere compiled by an independent survey firm. SUMMARY OF KEY FINDINGS The majority of respondents are agency owners who have been in the insurance industry for 12 or more years, giving their responses, and therefore our data, a credible edge. Walk-ins and referrals are still the primary means of attracting new business, while online sources like agency websites and social media continue to grow in efficacy. While fewer than 60.0% of respondents to the second survey are members of insurance industry associations themselves, over 80.0% of those respondents would recommend membership(s) to new producers. Results show that 92.5% of respondents who proactively reach out to customers regarding changes in their policies or other insurance needs believe that this personal touch increases customer retention and new business. Thank you to all of those who respondend to the surveys. We are grateful for your time and participation, which are vital to the success and value of this report. If you are interested in participating in future surveys, please click here to register to receive the next invitation. Thank you, Ryan O Connor Senior Vice President, Sales & Marketing Personable General Insurance Agency

4 PART 1: HOW TO ATTRACT BUSINESS & RETAIN IT SURVEY RESPONDENT DEMOGRAPHICS HERE S A GLIMPSE AT A PROFILE OF THE LARGEST RESPONDENT GROUP WHO PARTICIPATED IN THIS SURVEY: OWNER (58.4%) 25 OR FEWER BUSINESS POLICIES WRITTEN PER MONTH (36.4%) WRITE NON-STANDARD AUTO INSURANCE POLICIES IN ONLY ONE STATE (88.7%) 5 OR FEWER AGENCY EMPLOYEES (79.7%) AGENCY HAS BEEN SELLING NON-STANDARD AUTO INSURANCE POLICIES FOR 12+ YEARS (53.7%) PRIMARY STATE OF BUSINESS Survey participants came from 23 American states and territories. The top three states with the most respondents were Florida (31.0%), Texas (27.4%), and California (22.9%). Most agencies are localized, with 88.7% of respondents agencies only writing non-standard auto insurance policies in one state. Based on the responses provided, we can infer that many intend to stay that way; only 33.8% are actively looking for agency acquisition opportunities or books of business to purchase in order to increase number of office locations or size of effective territory. AGENCY SIZE Similar to the previous Trends Report results, smaller agencies that employ ten or fewer employees represent the largest group of respondents (90.7%). POLICIES WRITTEN PER MONTH While there was a large range in reported number of business policies written per month, 36.4% of respondents are currently writing 25 or fewer. BUSINESS POLICIES PER MONTH 20.7% 16.2% 26.7% 36.4% or fewer 0% 20% 40% 60% 80% 100% 1

5 SOURCE OF BUSINESS The two most commonly reported sources of new business were referrals (86.4%) and walk-ins (67.7%). When calculated as a group, however, online sources comprised a significant (cumulative) percentage of 79.9%. PRIMARY SOURCE OF BUSINESS 1 Referrals Walk-ins Agency Website Google (or other search engines) Yelp Social Media Online Advertising (Google PPC, Facebook ads, etc.) Offline Advertising (print, radio, tv, etc.) Networking Buying Leads ACCORDING TO 66.8% OF RESPONDENTS, REFERRALS HAVE THE MOST VALU- ABLE POTENTIAL FOR GROWING THEIR BUSINESSES. ALMOST 84.0% OF RESPONDENTS RELY ON THEIR CUSTOMERS TO MAKE RE- FERRALS ON THEIR OWN INSTEAD OF PROACTIVELY ASKING THEM FOR A LIST OF FRIENDS AND FAMILY TO REACH OUT TO OR TAKING ANOTHER DIRECT AC- TION TO OBTAIN REFERRALS. HOW DO YOU OBTAIN CUSTOMER REFERRALS? 83.8% 12.8% 3.4% 0% 20% 40% 60% 80% 100% I rely on customers to refer their friends or family to us on their own. I ask for a list of people that I contact directly. I do not currently try to obtain referrals from customers. Just over half of respondents (52.1%) say that they network with other businesses to obtain referrals and/or leads. Of that group, 92.0% say that this has been a successful way to generate more business. Similarly, while only 32.3% of respondents say that they have partnerships or sponsorships with local community groups like car dealerships or Little League teams, 84.0% of those who do have these affiliations found them to be a successful means of growing their businesses. 1 Respondents selected as many sources as were applicable (1 or more), leading to a total greater than 100%. 2

6 WALK-INS & PRINT ADVERTISING Over one-third of respondents (37.1%) have flyers/business cards in car washes, dry cleaners, or convenience stores, etc. While not as effective as the more personal networking and sponsorship tactics discussed above, 69.4% of these people say it has been successful. Results show that 45.1% advertise in Penny-Savers, local newspapers, magazines, and yellow pages. Of these, 65.8% say it has been an effective initiative. Although over 65.0% of respondents who use these forms of print advertising find them to be successful, the majority of overall survey participants believe print advertising is losing its value (58.0%). DO YOU FEEL THAT PRINT ADVERTISING IS GAINING, LOSING, OR MAINTAINING THE SAME VALUE? 58.0% 32.5% 9.5% Losing Value Maintaining Value Gaining Value 0% 20% 40% 60% 80% 100% SOCIAL MEDIA & ONLINE PRESENCE Half of survey participants obtain leads from customers directly visiting their website. Of this group, 87.1% say it is successful. The majority of agencies (88.5%) do not buy leads online. IT IS INTERESTING TO NOTE THAT WHILE MOST AGENCIES ARE NOT RUNNING ONLINE PROMOTIONS (76.2%), 50.9% OF THOSE WHO DO FIND THEM TO BE SUCCESSFUL. Many respondents are completely inactive on social media, with 42.9% of them reporting that they never post to social media sites to promote their business. Finding a way to close online leads and expanding your social media presence may be a great opportunity for your agency in HOW OFTEN DO YOU POST ON SOCIAL MEDIA TO PROMOTE YOUR BUSINESS? 18.6% 12.8% 11.5% 14.2% 42.9% Daily Weekly Monthly When I Remember Never 3

7 RENEWALS & RETENTION When it comes to renewals and retention, most respondents reach out to their customers directly. Our results show that this personal attention overwhelmingly pays off. When a customer comes up for renewal, 61.9% of agencies reach out directly to remind him of his upcoming renewal and request payment to continue coverage. Almost 93.0% of those who do this say that it is a more successful strategy than relying on the insurance company s renewal offer to continue coverage. Even more agencies (74.8%) reach out to their customers personally when they decide to cancel a policy. Again, 93.1% report that the personal approach is a more successful strategy than relying on the insurance company s final notice of cancellation to request payment. Of the respondents who proactively reach out to customers regarding changes to their policies or to learn about their other insurance needs (71.6%), 92.5% believe that this helps with customer retention and increases business. While 69.8% of respondents say that their current companies provide them with enough information to track and monitor customer retention, there is still a large portion of producers who are not receiving this vital information, which enables them to personalize customer service as mentioned above. ARE YOU PROVIDED ENOUGH INFORMATION FROM YOUR CURRENT COMPANIES TO TRACK AND MONITOR YOUR CUSTOMER RETENTION? 69.8% YES 30.2% NO 4

8 PRODUCERS WHO USE AN AGENCY MANAGEMENT SYSTEM AGENCIES WITH A WEBSITE PART 2: INDUSTRY ASSOCIATIONS & PARTNERSHIPS INDUSTRY ASSOCIATION MEMBERSHIP Results show that 41.3% of survey respondents belong to one or more insurance industry associations. The majority of members only belong to one association (63.2%), while 36.8% belong to multiple associations. ARE YOU A MEMBER OF ANY INSUR- ANCE INDUSTRY ASSOCIATIONS? NUMBER OF MEMBERSHIPS 1.7% 41.3% 58.7% No Yes 10.5% 24.6% 63.2% Respondents with industry association memberships collectively belong to 21 different insurance industry associations. The associations with the highest representation were Florida Association of Insurance Agents (18.0%), Independent Insurance Agents & Brokers of America (10.1%), AccuAgents (AccuAuto) (9.1%), and American Agents Alliance (9.1%). INDUSTRY ASSOCIATION MEMBERSHIP AccuAgents (AccuAuto) 9.1% American Agents Alliance 9.1% Brokers Insurance Group (BIG) Florida Association of Insurance Agents (FAIA) Georgia Insurance Agents Alliance (GIAA) 4.5% 4.5% 18.0% Independent Insurance Agents & Brokers of America (IIABA) 10.1% Latin American Agents Association (LAAA) 4.5% Professional Insurance Agents of Florida (PIA of Florida) 7.9% Property Casualty Insurance (PCI) Specialty Agents (SA) Specialty Insurance Agents (SIA) 4.5% 4.5% 6.7% Others 16.6% 5

9 MEMBERSHIP BENEFITS AND EVENTS Most insurance industry associations provide benefits to their members. The top three benefits of membership noted include newsletters/industry forms and manuals (80.4%), trade shows and conferences for members only (69.6%), and continuing education classes (64.3%). MEMBER BENEFITS INCLUDE: 2 Newsletters / industry forms & manuals Access to new appointments (otherwise unavailable for non-members) Tradeshows / conferences for members only Local association meetings Continuing education classes Discounted products and services 30.4% 41.1% 48.2% 69.6% 64.3% 80.4% DO YOU ATTEND ASSOCIATION EVENTS? (I.E. LOCAL MEETINGS, TRADE SHOWS/CONFERENCES) 12.2%17.2% 53.4% 17.2% Never Rarely Sometimes, when my schedule allows and depending on the event Yes, very often 0% 20% 40% 60% 80% 100% Most of those who attend association trade shows report that they attend to try to get a pulse on industry happenings (64.4%) and to connect with old colleagues while networking with new acquaintances (59.3%). A still significant, but smaller group, reports attending to obtain continuing education credits (32.2%). 2 Respondents selected as many benefits as were applicable (1 or more), leading to a total greater than 100%. 6

10 DO YOU ENJOY BEING A PART OF THESE ASSOCIATIONS, OR DO YOU FEEL OBLIGATED TO DO SO? 3 I attend to try to get a pulse on industry happenings I am attending to network with new acquaintances and see old colleagues I attend to obtain continuing education credits I do not attend trade shows 23.7% 32.2% 64.4% 59.3% The majority of respondents (77.6%) would recommend that new producers join industry associations for networking purposes and to stay up-to-date on industry news and trends. WOULD YOU RECOMMEND NEW PRODUCERS TO JOIN INDUSTRY ASSOCIATIONS? 5.2% 17.2% 77.6% No Maybe Yes Most respondents (75.9%) who are members of insurance industry associations enjoy the membership and its benefits. They are members because of the value it provides, not because they feel obligated to do so. DO YOU ENJOY BEING A PART OF THESE ASSOCIATIONS, OR DO YOU FEEL OBLIGATED TO DO SO? 75.9% 12.1% 6.9% 5.1% I enjoy being a member and appreciate the benefits I receive Never really thought about assessing the value of participation I have been participating for so long that it is more of a legacy participation than anything I feel obligated to participate due to industry perception 0% 20% 40% 60% 80% 100% 3 Respondents selected as many benefits as were applicable (1 or more), leading to a total greater than 100%. 7

11 Nearly half of respondents (49.2%) believe that the value of industry association membership is staying the same, while 32.2% believe it is increasing. DO YOU BELIEVE THAT THE VALUE OF BEING AN ASSOCIATION MEMBER IS INCREASING, DECREASING, OR STAYING THE SAME? 49.2% 32.2% 18.6% Increasing Staying the same Decreasing 0% 20% 40% 60% 80% 100% NON-MEMBERS There are several reasons why producers may choose to opt out of industry association membership. Most commonly, they choose not to be members because they believe membership fees are too expensive (43.7%) or because they feel that there are not enough benefits (42.3%). The vast majority (94.6%) of those who are not members would likely consider joining industry associations in the future, with 35.9% saying they would absolutely consider joining and 58.7% saying they might consider it. WOULD YOU EVER CONSIDER JOINING AN INDUSTRY ASSOCIATION IN THE FUTURE? 5.4% 35.9% 58.7% Never Maybe Yes Based on our findings, almost 80% of respondents would either consider recommending or would definitely recommend that new producers join an industry association. Also, close to 95% of respondents who are not currently association members would consider joining an association in the future. There is a high response rate of people who simply need a small push to join an association. The largest deterrent of memberships is the cost. Perhaps associations should offer more levels of membership that come at a cheaper price so producers could decide on their membership based on their budget. 8

12 CLOSING REMARKS What does this data mean to you? The majority of individuals that responded to these surveys have been in the industry for over a decade and still rely on walk-ins or referrals to drive their business. We have a mature, grassroots industry that has been doing things the same way for a long time. This creates a valuable opportunity for you to grow business organically via an online presence and other social media outlets. If you are currently not taking advantage of this valuable opportunity, you might want to consider doing so. Furthermore, participating in association events is important in order to remain connected to the historical roots of the industry and current industry trends and opportunities. While you can see that there are large number of people who are not currently association members, the vast majority of respondents believe associations are maintaining or increasing in value. Non-members in our industry should re-evaluate their choice not to participate and perhaps reconsider the possibilities of joining. Thank you again for your interest in Personable Insurance s Non-Standard Auto Independent Agency Trends Report. We hope that you will share this report with your industry colleagues and business partners. Please provide us any feedback or suggestions for future surveys and trend reports here. Your input is greatly appreciated. Best regards, The Personable Insurance Team 9