Insurance Consumers Trust People, Not Brand, says Study

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Insurance Consumers Trust People, Not Brand, says Study

Agents outrank companies in Northwestern University study.

Terri Goveia on August 12, 2010

Should insurers put more effort into building a brand or their sales force? The latter, say researchers at Northwestern University, who found that insurance agents are more important to consumers than a company or brand.

Customer experience with sales staff–like agents or brokers–makes a better impression that dealing with the company itself, according to researchers at Northwestern University investigating the consumer-agent-company relationship. Consumers rating their dealings with agents from a major U.S. insurer ranked that experience higher than they rated the company, the Northwestern/FORUM study, The Employee or the Company, found.

Agents earned 8.96 on a 10-point scale, compared to the insurer, which earned 8.35.

“Consumers make a clear distinction between how they feel about the agent and how they feel about the company,” states Frank Mulhern, the study’s author, in the report. “This suggests that companies have more to gain by investing in sales agents than in building the brand.”

The study puts insurance sales under the microscope because it’s a “high involvement” transaction that creates a long-term customer-company relationship.

Personal vs. impersonal interaction

Part of the difference: consumers interact with agents in a very different way than they do with the company, states Mulhern. Filing a claim, or visiting an agent’s office is more personal that a visit to a website or getting a notice of a rate increase from the company, he notes.

“The key implication is that the agent plays a positive, measurable role in the customer experience.”

Although researchers examined three factors–results of a consumer satisfaction survey, an employee engagement survey and a metric examining agent performance–they found that the other two factors didn’t have as much significance as the agent-consumer experience.

“Focusing on employee engagement is not enough,” Mulhern states. “Performance improves the most when engagement is paired with a high-quality customer experience.”

He suggests that since so much of the customer experience relies on the consumer-agent interaction, that companies put special emphasis on sales training, incentives and rewards and career development opportunities for their sales force.