Agents Dominate Workers Compensation Marketplace

written by jpaul
11-18-2009
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Article written by Veronica DeVore (veronica.devore@iiaba.net)

Writer/Editor for the Big "I"
www.iiab.net

The Majority of small business clients prefer to purchase coverage through an independent agent.

While personal lines customers often turn to the Internet for their insurance needs, small business owners clearly prefer working directly with an agent to purchase workers' compensation coverage.

A recent survey from EMPLOYERS, a specialty provider of workers' compensation insurance, reveals that 69% of small business owners who have workers' compensation coverage will purchase it through an agent in the future. In addition, 45% of the 500 small business owners surveyed are combining workers' compensation with other coverages such as payroll, health care and general liability.

"(Combining coverages) is convenient if you think about all the things a small business owner has to deal with every day," says Martin Welch, president and chief operating officer of EMPLOYERS. "If you can lump everything into a single transaction, it's easier and agents have picked up on that."

Nine percent of the small business owners surveyed said they currently combine workers' compensation with health coverage for their employees, and 16% said they plan to do so in the future. Twelve percent currently combine payroll with workers' compensation, while 14% expect to do so at their next renewal.

For Gail Bortolotti, commercial lines manager at Farrell Backlund Insurance Agency in Taunton, Mass., providing workers' compensation coverage is just a starting point for addressing all of her small business clients' insurance needs.

Attracting new clients is a highly personal matter where the agency relies on referrals, phone calls and letters to get the word out. The Web site provides generic quotes, but clients call or visit the agency to change or renew policies.

While this personal touch is clearly valued among commercial insureds, EMPLOYERS has identified a gradual shift in how customers plan to service and perhaps even purchase policies in the future. The survey reports that the Internet's role in workers' compensation purchases will increase from 11% to 17% in the next 12 months, and many respondents plan to go online for information and quotes at their next renewal.

"Agents have to earn their role (as an advisor) by delivering more and more value," says Welch. "They can do so with Internet sites of their own to help the insured obtain information."

One agency has done just that by creating a separate Web site only for workers' compensation needs. Drew Roberts, an account executive at Black Bear Insurance Agency in Longwood, Fla., says that while agents are still at the heart of selling workers' compensation coverage at his agency, the Web site simplifies the process by answering customer questions in detail and by allowing quotes to be submitted electronically.

Roberts adds that busy small business owners like to be able to read about coverage and complete quote forms "at midnight" if they want to, and he and his fellow agents like the time they save by directing customers to the Web site when questions arise. The agency plans to add a blog section to address even more customer concerns in an online format.

"It's a way for us to provide general information and an introduction (to workers' compensation coverage)," Roberts says. "We don't have to answer questions multiple times and we can answer them more thoroughly by using the Web site."