Give and take: insurers are eager to listen to agent advisory councils.

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* The Background: Agent advisory councils are instrumental in giving feedback that improves how insurance companies operate.

* The News: Insurers say the boards help them understand what agents are thinking about various products and services.

* The Upshot: Agents say the boards give them a direct channel to senior executives to both praise and criticize company operations.

If you want to know what agents are thinking about, you have to ask them.

That's why commercial property/ casualty insurer CNA launched Pacer, its advisory council of independent agents. The name originally stood for Producer Agent Council of the Eastern Region, the first council of agents that CNA called together 42 years ago. That council had such an impact that CNA spread the concept throughout the company; today, 33 Pacer branch councils meet regularly.

John Hennessy, senior vice president of distribution for CNA, said the council "allows us to see ourselves through the agent's eyes. It allows us to understand what the emerging issues are as well as emerging opportunities."

For instance, a Pacer council first suggested there was a growing opportunity to insure the technology sector. CNA responded by investing in products that target the tech industry and has had great success, Hennessy said. "It's really showing up as a key area of growth for us;' he said.

When agents complained CNA was lagging in processing claims, the company made major investments to improve the claims system based on Pacer feedback, Hennessy said.

Agents also bring their beefs to the table, and meetings can be contentious, he said. "They come loaded for bear sometimes and we are ready to have those confrontations. They want CNA to be successful and more successful for them," Hennessy said.

However; he stressed, most meetings are not heated. "It's really about listening and being prepared to take swift action," Hennessy said.

Useful Feedback

Insurance companies may call their agent advisory boards by different names, and organize them through different structures, but those that have established agents' advisory councils say the feedback is priceless.

"The real purpose for the agency council is to create an open dialogue between us and our agencies around a number of topics that are important to us and our agencies," said Ken Branch, assistant vice president for sales and customer service for Encompass Insurance Co., a personal lines writer and unit of Allstate Insurance.

Encompass has two councils of agents: the President's Board, which it launched in January 2008 to focus on national issues; and NorthStar, a regional advisory board, which was in place when Allstate acquired the personal lines business from CNA. In 1999, Allstate acquired the financial liability and day-to-day servicing obligations for CNA's personal lines business through contractual arrangements.

Allstate also has an agency council, the National Advisory Board, which it formed in 2003.

As for Encompass, "NorthStar focuses on operational issues, while the President's Council focuses on strategic issues," Branch said.

Lynn Jones, director of independent agency sales operations for Encompass, explained that NorthStar has about 10 regional councils and a national committee that facilitate communication between agents and the company.

Ten to 12 agents serve on each regional council, Jones said. Each region is represented at the national level by a chairperson who attends a national meeting twice a year. They bring regional issues to the attention of the national council, plus carry, back issues from the national council to the regional level. "It's a two-way conversation," Jones said.

Branch said the councils give agents an opportunity to offer input on everything--from how a new technology rollout is working to how to improve products, sales and marketing.

For instance, agents who were involved in a technology project suggested some screen adjustments. When it got to a national level, everyone agreed with the local agents, and those adjustments were made.

Another Point of View

Agents love having a voice in how their company does business.

"We see ourselves as ambassadors from the field to the home office and from the home office to the field," said New York Life Insurance Agent Kathy Davenport, who has just been elected the first female president of New York Life's Agents Advisory Council.

"Too often in business, management makes an executive decision and people have to live with it," Davenport said. "That's not what New York Life does. It's amazing. They ask us, 'What do you want? What do you need? What can we do to make your life easier?'"

Davenport said New York Life's council helps sort through thousands of suggestions and complaints from agents, many of which have an impact.

For instance, agents were concerned about succession planning, and who would take over their books of business when they retired. New York Life worked out a way for senior agents to allow younger agents to tap into their books of business.

'I know of at least a dozen third-generation New York Life agents," Davenport said. "Other companies don't allow you to inherit a book of business."

Like most agents who participate in advisory councils, Davenport is not compensated for the additional time she puts in.

"We are volunteers," she said. "We take it very seriously. We do not talk about compensation. We talk about how to improve products and services, how to better serve our clients."

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Learn More

CNA Insurance Cos.

A.M. Best Company # 18313

Distribution" Agents and brokers

Encompass Insurance Co.

A.M. Best Company # 11794

Distribution: Independent agents

New York Life Insurance Co.

A.M. Best Company # 06820

Distribution: Career agents, independent agents and brokers, alternative channels

For ratings and other financial strength information visit www.ambest.com.

RELATED ARTICLE: One agent's story.

Central Mutual Insurance Co. offers a special personal lines program for high-performing agencies. Central's "Blue Streak" program, launched in 1979, provides agencies with the tools they need to grow profitably.

The program's success is largely due to the utilization of agent advisory councils, said Michael Guth, senior vice president of personal lines for Central Mutual.

Ken Ewan, president of Evans, Ewan, & Brady Agency, based in Georgetown, Texas, has been a member of the Blue Streak program since 2004, representing agencies from Central's Southwest region.

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The Central Insurance Cos., based in Van Wert, Ohio, underwrite both personal and commercial insurance coverages. Its commercial lines consist primarily of commercial multiperil, workers' compensation and commercial auto liability and represent approximately 50% of total net premiums written. Personal lines, which consist of auto, homeowners, personal umbrella and dwelling fire lines of business, generate the other half of total net premiums written. Business is distributed through approximately 460 independent agents, according to the company's AMB Credit Report.

Central's Blue Streak Advisory Council advises Central's personal lines management on the effectiveness of current products and programs and provides ideas for ways to improve company operations and agency relationships that benefit all agencies representing the company, Guth said.

Ewan spoke with Best's Review about his advisory council experiences.

Why is it important to be on an advisory council?

By being on the council you are assured that every change you want will be heard and responded to by the president and his staff. I know Central Insurance President Bill Purmort on a personal basis. By serving, I get to know each council member personally and have a strong working relationship with Central management that will serve my customers.

Another good example is what happened a few years ago when Texas went through the mold crisis. Policyholders were being nonrenewed by companies, other companies left the state and still other companies would not write new business or limited production. Everyone was afraid to write anything, but because of our great working relationship, Central stood by us and never stopped writing business.

How are you chosen to be a member? What are the criteria?

The council is comprised of 12 members who are chosen by Central because of their relationship with the company, including which agencies are profitable, producing the most new business, the most volume and writing the business that matches Central's guidelines and philosophy. They represent approximately 400-plus agencies at the National Blue Streak meetings. It's all about relationships.

Today, it's my strong relationship with our Central underwriter, Steve Burris, that really helped me get chosen as a member. Over the years, Steve has given our agency a game plan to write packages--everything in twos, not just individual policies.

For example, a man came into our office recently and needed to purchase an auto policy. If we'd only done his auto, we couldn't have saved him any money, but by going through Central we saved him $400 by writing a package that included both his auto and his home.

Does being a council member help the agent?

Absolutely. By being a council member, I get to be heard and help improve the process between Central and the way we do business. Also, because of my membership with the Combined Agents of America, I'm able to pass along not just my personal suggestions, but the experiences of the other 40 agency members that are a part of CAA and their experience with Central. So in a larger way, I get to impact and improve the industry not just for myself and my own business, but for a greater group of agency owners.

--Lynna Goch