When Should Insurance Companies Use Licensed Agents Over Brokers?

If you’re like most insurance agencies, you’re probably always on the lookout for new ways to reach new customers.

From billboards and newspaper ads and club sponsorships and car decals, extending an agency’s influence is one of the best ways to attract new policyholders. After all, the first step in the customer lifecycle is brand recognition and attraction!

Advertising is a great way to spread the word, but an even more effective method of customer attraction is offering a stellar service. Great rates, responsive support, and a speedy claims process are all part of this framework but there’s still one piece missing: a strong agent presence, because an agent acts as the face of your company.

Although the insurance industry is becoming more digitized by the minute, giving your customers a real-life person they can talk to and be guided by is an invaluable asset for any insurance company.

Not only is there a difference between licensed agents and non-licensed agents, outsourcing your licensed agents could be one of the smartest business decisions you can make.

Licensed Agent vs. Broker

When it comes to buying an insurance policy, customers have a couple of options these days. First, they can do it by themselves by researching what kinds of policies are available, determining which match their needs, and buying a policy straight from the insurance company.

A broker usually will not have a contractual agreement with any of these companies either, so you can think of a broker as someone who represents the customer rather than the insurance company.

On the other hand, a licensed agent will typically be associated with a single insurance provider.  In exchange for a commission, an agent’s office will bring in new customers through community advertising, answer any insurance questions current policyholders might have, and may conduct reviews to see if all of a policyholder’s risks are being covered by their current policy.

So, while a broker might be viewed as a representation for the customer, an agent is a representation for a particular insurance company. Agents act as more than just a way to bring in new customers — they’re also committed brand advocates that can increase customer satisfaction, find new coverage possibilities, and increase company exposure at the same time.

If you want to strengthen your company’s image and presence, there’s no better way to do so than by investing in licensed agents.

How Outsourcing Your Licensed Agents Can Benefit You — Big Time

Outsourcing your licensed agents through an Insurance BPO (business process outsourcer) can save your company both time and money by handling the all the legwork. But there are other benefits as well. Outsourcing your licensed agents can also help you: 

  • Extend Your Reach:

Outsourcing licensed agents nationally will give your company access to more locations, more potential customers, and ultimately, more business. While you may think a digital presence and advertising is enough to bring new customers through the door, a brick-and-mortar physical presence can do wonders for increasing business.

Setting up shop is also a great way to engage prospects in sectors that have been particularly tough to bring in business from. Since they’re typically commission-based, agents will usually carry out community-specific advertisement efforts that can help bring in business that’s normally resistant.

  • Increase Revenue:

With more customers and greater business potential comes better financial stability. With the increase in revenue you could see from outsourcing your licensed agents, you can invest in new services and features to attract even more customers.

  • Retain More Customers:

An agent also acts as a measure to reduce customer drop-offs. The more your customers are directly connected to an agent, the less likely they’ll be to cancel their policies. Beyond that, an agent may be better able to save unhappy customers from leaving since they’re better acquainted with their individual needs than a customer-service line.

  • Boost Service Quality:

Increasing your agent presence nationally is also a great way to boost customer satisfaction. Agents can help identify gaps in coverage, potential discounts, discrepancies in pricing, and features a customer may not have known were available to them. This can go a long way in terms of keeping your policyholders happy.

  • Strengthen Your Brand:

And finally, an agent can help you better communicate your overarching company values and quality to even more communities around the country.

In order to stay ahead of the competition in this exceedingly competitive industry, it is important to consider new ways to differentiate your brand. Outsourcing licensed agents may be the key differentiator to catapult your company to the top.