According to a recent nationwide survey conducted by Deep Customer Connections, Inc. (DCC), a Massachusetts-based management consulting firm serving the property and casualty (P/C) industry, National Grange Mutual (NGM), the flagship company of The Main Street America Group, received the highest rating of all 85 P/C carriers studied in terms of “Ease of Doing Business” as measured by its performance relative to the expectations of the independent agents who carry the company’s products.
“Over the years, we’ve certainly paid a lot of attention to customer satisfaction through a variety of means such as surveys, agent and CSR councils, and the day-in, day-out contact we have with our customers—our agents—in the course of doing business,” said Tom Van Berkel, NGM’s president and CEO. “What we’ve pretty consistently heard is that our agents consider us to be a good company to partner with—one that’s easy to do business with.
“But this study is different in that it represents independent confirmation. We played no part in its design or execution. In fact, we didn’t even know the study was being conducted until we were informed of the results. That we came out at the head of the class is very gratifying to hear.”
The web-based survey was sent to more than 30,000 independent agencies nationwide. More than 500 agencies responded. According to G. Barry Klein, the founder of UltimateInsuranceLinks.com, the company that managed the logistics of the survey for DCC, “That is one of the highest response rates we’ve ever had when mass e-mailing to that list of independent insurance agents.”
The purpose of the study was to reportedly gain greater understanding of the notion of “Ease of Doing Business,” or EDB: its importance, the factors that determine just what constitutes EDB for independent agencies when working with P/C carriers in general, and the performance of specific carriers relative to each of those factors.
“In our work, we talk to a lot of independent agents,” said Nort Salz, a DCC principal. “Almost invariably, at some point they’ll talk about how carrier X, Y, or Z is—or isn’t—’easy to do business with.’ So we decided to put some parameters around what agents mean when they talk about EDB and rate the performance of P/C carriers along those dimensions.”
“One thing that jumped out at us,” added Paul Croke, also a DCC principal, “is that there is virtual unanimity among independent agents that EDB is an extremely critical factor in determining the carrier with whom they place a piece of business. On a four-point scale, with four indicating ‘Extremely Important’ and one indicating ‘Not Important at All’, the average importance rating of EDB was 3.88, with fully 97 percent of respondents rating it a four.”
Respondents were first asked to rate the following 10 EDB factors according to their importance.
The degree to which the P/C carrier:
Understands and acts on the needs of agency personnel;
Is responsive in underwriting;
Is flexible in underwriting;
Provides accurate, timely policy services;
Provides effective, user-friendly technology;
Handles claims promptly;
Handles claims fairly;
Provides marketing support;
Provides technical support (e.g., specialty coverages, loss control, etc.);
Makes it easy for the agency’s customers—the insureds—to do business with that agency.
Each respondent then rated five separate P/C carriers as to the carriers’ performance relative to the 10 EDB factors. Once again, a four-point scale was used, with four indicating ‘Excellent Performance’ and one indicating ‘Poor Performance.’
Said Croke, “In effect, importance serves as a proxy for an agency’s expectations along a given dimension. If, for example, they gave ‘Promptness in Handling Claims’ an importance rating of four, it stands to reason that they have pretty high expectations for how promptly a carrier will handle claims. So when you look at the difference between an importance rating and a performance rating for each dimension, you come up with what can be thought of as a carrier’s ‘Performance Gap’.”
It’s here that NGM reportedly stood out from the field. In fully seven of the 10 EDB categories rated, NGM’s performance exceeded agency expectations.
That reportedly cannot be said of any of the other 85 carriers rated for whom the number of responses collected was large enough to be able to draw significant inferences. When the Performance Gap for all 10 categories was summed—that is, the total amount by which a carrier’s performance exceeded its agencies’ expectations—NGM once again came in at number one among those of the 85 carriers drawing responses of similarly significant sample size.
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