7 Reasons Independent Agents Are Winning

In years past, the prevailing wisdom among many industry pundits was that independent agents would gradually decline in importance until they became irrelevant. They predicted that, in a world that continued to evolve toward digitalization, online transactions, and customer self-service, agents simply could not survive. However, the role of independent agents is more important than ever today, and the proof is in the numbers. 

According to Independent Insurance Agents and Brokers of America (IIABA), independent agents have increased their share of the commercial lines market to 85% today—a 5 percentage point jump over a decade ago. Even in the highly commoditized world of personal auto, independent agents’ percentage of premium has climbed to a 10-year high—while direct response is steady and captive agents continue a decade-long decline. 

There are seven reasons independent agents are winning—and poised to continue doing so. 

1. Resiliency. To paraphrase Charles Darwin, the species that survives change is the one that is most adaptable. Over the years, independent agents have been faced with relentless change: new entrants into the insurance space that were predicted to become a dominant force, new technology that was forecast to siphon customers away, consolidation that was projected to squeeze agencies out of existence, and more. But far from going extinct, independent agents have adapted and evolved, and their value has never been higher.
2. Technological innovation. Technology that some pundits believed would doom independent agents has instead revolutionized the way they do business. Agencies were among the first to embrace paperless processing, mobile technologies, and countless innovations that improved both sales and servicing. They have made leading-edge management systems central to their business, embraced (and demanded) SEMCI, invested in staff who specialize in technology, and capitalized on digital marketing and retention strategies. Not to be overlooked is that because of technological adoption and innovation, agents were better prepared and able to pivot to the remote/hybrid environment caused by the pandemic. 
3. Talent development. Perhaps more than any other industry, independent agencies understand the need to develop talent, both for their own business and the industry as a whole. They continue to refine strategies for recruiting and retaining people who are a good fit for the insurance business. 
4. Unmatched service. Independent agents continue to adopt technology and adapt to a digital world, but they haven’t forgotten that insurance is a relationship business. They understand why customers choose to do business with a trusted advisor. They also deliver better customer service and create greater customer satisfaction than captive agents and direct writers, provide a personal touch that remote call centers can’t deliver, and offer customers options and freedom of choice in identifying the best insurance solution. 
5. Account rounding. The more connections you have with a customer, the deeper the relationship is. Agencies have embraced that philosophy by providing a spectrum of services to clients beyond P&C. This includes not only additional insurance products such as life/health and benefits, but also loss control, risk management, claims service, and more. 
6. Continued education. Agencies are willing to make investments in education and cultivate staff expertise to counsel clients in the complicated subject of insurance. The percentage of agents and CSRs who hold industry designations continues to grow.
7. Carrier partnerships. Simply put, agencies are better than ever at selecting carriers that truly add value and efficiency to their operations. They also realize the importance of franchise value and building deeper partnerships with a select number of carriers that demonstrate a shared commitment to mutual success. 

Independent agents have proven the doubters wrong, showing that they will not only survive, but thrive. Additionally, the strengths that have propelled agents through constant change position them for continued growth and success in the years ahead. Building on these strengths, agents can deliver even more value to customers by adding new services, expanding sales and self-service channels, and capitalizing on the “anytime, anywhere” expectations of consumers in this digital age. 

Acuity and Independent Agents

Acuity’s common purpose states, “With kind hearts, we dare to care for our family of employees, agents, and customers, by staring down risk.” Our agents are part of our family, and we care for them. Independent agents also continue to be a driving force of Acuity’s growth and profitability. We have the heart of a regional carrier with the strength of a national, which is a credit to the partnerships we have forged with independent agents.

Independent agents also benefit from the strength we offer. Rated A+ by A.M. Best and S&P, Acuity has earned a combined ratio of less than 100 for 11 consecutive years and consistently outperformed the industry across the past two decades in terms of both growth and profitability. We ended 2021 at a record $3.3 billion in policyholders’ surplus (GAAP) and achieved the strongest leverage ratio in our 96-year history. As a result of this remarkable consistency, we are a stable resource for business for independent agents, year in and year out, regardless of insurance market conditions. 

Acuity also delivers independent agents resources they need to be successful. Easy online quoting and account management, agency-branded marketing materials, and an active social media presence across all our key market segments in both commercial and personal lines are just some of the ways we help keep agents at the center of the customer/agency/Acuity relationship. We also have no sales goals or other artificial objectives for our underwriters to meet—we simply want to be the go-to company for independent agents. 

We are incredibly thankful to agents, dedicated to the independent agency distribution channel in meeting our customers’ needs, and committed to working in partnership with agencies across the country.