Commercial lines distribution: Agencies, carriers diverge on digital priorities

It’s not uncommon for agents/brokers and carriers to express frustration with one another. For many risks, especially those more complex, agents are prone to gripe about carriers’ submission process, which is often laborious and requires a lot of back and forth with the underwriter. On the other hand, carriers frequently encounter challenges with agents misunderstanding their appetite or slowly adopting new tech capabilities. These challenges – and others – emphasize the importance of carriers investing in digital capabilities to support distributors and improve customer experience, increase efficiencies, and grow business.

SMA recently surveyed agency executives in commercial lines to understand their satisfaction with insurers’ digital sales and servicing offerings and the capabilities they believe insurers should invest in to support their needs. The study’s results were published in two separate research reports focused on the small commercial and mid/large commercial segments.

Immediately, the research shows significant misalignment between commercial lines agents’ most-wanted digital sales capabilities and carriers’ current investment plans across the sixteen options presented. Of course, it is unrealistic to expect 100% alignment across the board as the objectives and needs of agencies and carriers are different. But as co-dependent partners, there should be closer alignment in the many areas where there is mutual advantage.

In the mid/large commercial arena, over two-thirds of agents seek AMS real-time upload integration, whereas only a quarter of carriers is investing in this technology. In this segment, carriers are also hyper-focusing on enhancing their agent sales portal, but only 14% of agents say this area currently needs greater improvement. In contrast, agents and carriers in small commercial lines see eye-to-eye on the needs and investments in both of these capabilities. Instead, they do not align with other technologies, such as risk appetite and proposal tools.

There is greater consensus among commercial lines agents and carriers regarding the seventeen digital servicing capabilities featured in the survey. In both small and mid/large commercial lines, agents’ needs align with carriers’ investments in commission dashboards and pay-a-bill technologies. Agents in mid/large commercial lines also emphasize the importance of self-servicing capabilities, such as policy download and claims filing capabilities, and carriers appear to meet demands in these areas. One area where commercial lines agents and carriers don’t align is in auto certificates. Half of mid/large commercial agents and 36% of small commercial agents say this is a top need for their practices. Still, less than 20% of carriers in both segments are funding projects in the capability.

Despite agents and brokers becoming increasingly satisfied with digital sales and servicing offerings, there continues to be a division between where agents want carriers to invest and carriers’ actual investment plans. Agents want further investment in distribution technologies that will help them increase efficiency and service their policyholders. Carriers that can align strategies and investments with both their internal and distributor needs will differentiate themselves and become partners of choice for commercial lines agents and brokers.

For more information on agencies’ digital strategies and priorities in small commercial and mid/large commercial lines, read our recent research reports: “P&C Agency Distribution: Digital Strategies and Plans for Small Commercial Lines in 2023” and “P&C Agency Distribution: Digital Strategies and Plans for Mid/Large Commercial Lines in 2023.” These reports are part of SMA’s research series designed to provide actionable insights for carriers on distributor plans and expectations. Contact the author for more information on this new research and advisory services offerings for distribution.