When it comes to purchasing insurance, whether it pertains to your car, home, or any other possession, there’s no right or wrong insurance company. It majorly depends on your personal preferences and experience with different players in the huge market.
According to the Insurance Journal, regional insurance carriers are rated better than the national insurance carriers based on service level quality. For them, a customer is not just a number in a list; they typically offer a highly personalized service. Yet, the high number of fraud cases attributed to the regionally operating players has many people questioning the reliability of regional insurance careers. Customers need to be extra vigilant when dealing with insurance providers.
We aim to scrutinize the major differences between the national and regional insurance providers and explore what each has to offer to prospective buyers. However, before we dive into the underlying differences between the national vs. regional insurance carriers, it is important to understand what each of them is and how they operate:
National Insurance Carriers
National insurance carriers are giant insurance companies whose specialties and standards stretch across multiple states. They face stiff competition from a multitude of other national players. Two major factors that differentiate a growing national insurance carrier from a failing one are the speed to market across different states and the scope of their network.
National insurance carriers often look to maximize their coverage opportunities. They are determined to take advantage of the dynamic world of risk by launching innovative solutions and products. To render this, they first pay particular attention to obtaining insights into new risks and then go on to streamline operations for new products.
National insurance carriers recognize the challenges created by the competition. To stand out in a crowded market and meet their profitability and growth objectives, product differentiation is essential. As a result, national insurance carriers adopt a customer-centric approach, using it as a formula to achieve nationwide business growth. They put policyholders at the center while ensuring access for distribution channel partners.
Through their flexible solutions, national insurance carriers are able to gain plenty of benefits. They can take advantage of opportunities in the new markets that they enter. Constant focus on innovation and the introduction of immensely needed insurance coverage greatly increase their speed to market around the country.
As explained earlier, offering distinction service and differentiating products from the competition are the keys to success. National insurance carriers are able to do this using their advanced technology, which also helps improve connections with both distribution channel partners and customers. On top of that, their highly sophisticated data analytics solutions help them make informed business decisions, such as those related to pricing and risk selection. This provides these insurance carriers with significant strategic advantages.
Regional Insurance Carriers
Regional insurance carriers are small insurers typically characterized by well-established operating processes. Facing fierce competition from both national insurance carriers and insurance startups, regional insurance companies often struggle to modernize and achieve growth. Some regional players also have a hard time retaining their customers.
To become more competitive and efficient, regional insurance carriers look for cost-effective ways to serve clients. Regional insurers also focus on improving their operational efficiency. However, their expense structures and operating models can significantly weaken their ability to take advantage of new business opportunities. It also hinders their ability to quickly respond to market changes.
Regional insurance carriers can grow in two ways. They can either adopt new approaches to serve their existing loyal customers or explore new market opportunities elsewhere. As long as they can adapt to changing market conditions and keep introducing innovative products, they can stay on the path to growth.
Regional insurance carriers that wish to remain independent are facing a lot of pressure industry-wide to consolidate. To sustain profitability and growth, they need to simplify things for customers and agents while strengthening their businesses.
To survive and prosper in the highly competitive insurance market, regional insurers need flexible core business process solutions, which can benefit them in a number of ways. Since innovation is the key to growing and remaining competitive, they should introduce business processes that offer cost-effective techniques to timely develop new products.
When it comes to core business processes though, the major aspect regional insurance carriers lack in is automation. To pursue innovation and thereby deliver quality services, they must leverage automation in their core business processes.
Regional insurance carriers can also play tough on the competition by coming up with distinctive service and improving the ease-of-access to information for their agents.
National vs. Regional Insurance Carriers: The Differences
Now that you’re clear on what they are exactly, let’s go through the major differences between the national vs. regional insurance carriers. To offer a seamless insurance purchasing process to customers, national insurance carriers proactively invest in advanced technology and talent. On the other hand, regional insurance carriers offer easy access but don’t have the potential to make as many investments as the national insurers can make.
While national insurance carriers are known to process your claims at record speeds, regional insurers take considerably longer to examine claims due to their limited resources and reserves. It’s their massive reserves that allow national insurers to maintain that pace.
Moreover, national carriers aren’t deeply aware of the specific risks in individual markets so their policies don’t target any one area. Instead, they use the one-size-fits-all approach by providing standard coverage in all markets and locations they operate in.
In contrast, regional carriers are well aware of the insurance needs of the territory they serve in. They possess a comprehensive knowledge of your area and will quickly identify the potential risks associated with your location. Thus, their policies greatly address the needs of their respective locations, keeping into account the risks specific to their markets. For instance, if you live in an area with a high car accident rate, a regional insurance carrier will recommend you useful tips and offer much better car insurance products than national insurance carriers.
One of the most amazing aspects of regional insurance carriers is that you can expect personalized service and relationships from them. Over the course of your coverage, you’ll likely work or speak to the same representative every time you call them. The person dedicated to you will be most familiar with your position and can relate to the policy. They are determined to sell you insurance, which is why they’ll want to establish a strong relationship with you, one that really pays off.
Customers prefer close relationships, which ensures ease of underwriting. They are pleased when the representative addresses them with their name. This is usually not the case with national insurance carriers, which are too large to offer this level of personalized service. They typically deal with thousands of customers every day so don’t be surprised when you’re greeted by a different person on every phone call. Even if a national carrier dedicates a person to handle your account, it will only send the representative to see you once a year.
This also means that although national carriers provide a broad spectrum of coverage to address all types of insurance requests, they aren’t very keen on customizing coverage options for you. Regional carriers are usually more flexible in customizing policies based on your needs and requirements. However, the processing of claims still takes time with regional carriers. National insurance carriers, as stated earlier, offer speedy processes.
Insurance should never be an impulsive purchase. You should take the time to study the various insurance options both on the national and regional levels. When considering the differences between the national vs. regional insurance carriers, both options have their benefits and hazards.
Many people looking to purchase insurance for the first time are told to stick to well-known, national insurance companies to avoid any fraudulent situations. However, there are many reliable insurance companies at the regional level promising much better and personalized services than the national players.
Even the national insurance giants started out as small, regional insurers before getting that big. They responded to changing market needs, took advantage of emerging opportunities, took the challenge to innovate and expand to new markets, and eventually achieved that growth.
Yet, regional insurance carriers offer unmatched service quality with their highly personalized approach. Having said that, some fraudulent entities still exist out there that operate locally to run away with people’s money. This has adversely affected the reputation of regional insurance carriers. However, by conducting background checks and some research, you can access the most authentic regional players offering one of the best insurance services.
We truly hope that you end up working with the most authentic insurance carrier to fulfill your requirements and needs. Check out these Regional Insurance Carriers You Should Consider.
Digital Marketing Director