The last few years have been unlike any other in the history of personal lines insurance. Following a series of historic weather events, with 24 billion-dollar weather and climate disasters in the U.S. in 2024 alone, coupled with rampant inflation, the personal lines insurance landscape has shifted toward more specialized and tailored offerings. Independent agents have always been respected advisors to their clients, and today's complex insurance market makes their advisory role even more crucial.

Customers require more comprehensive consultation on total protection and an understanding of policy nuances, and agents have the opportunity to help clients regain control over loss trends through risk mitigation consulting. Carriers, too, are increasingly relying on their partners to deliver profitable, high-quality business. But how can agents best deliver on these goals?

Amplifying the Impact of Agents as Trusted Advisors

Leading agents excel at consulting with customers on coverage gaps and loss mitigation practices. They not only make customers aware of potential risks but also help them learn how to protect themselves effectively. The same way we look to trusted doctors for full health checks, customers look to independent agents as trusted advisors for full risk checks.

Here are four ways we see our best partners delivering value in today's environment:

1) Consulting on total protection. Top agents recognize the importance of outlining both the benefits and drawbacks of their customers' policy choices to prevent unintentionally sacrificing important coverage. This comprehensive approach includes addressing everything from the essentials—like umbrella policies, cyber and valuable items—to recreational toys like boats and motorcycles.

We've seen top agents leverage different strategies to successfully guide their clients on these products. For some, it's about focusing on the growing needs for this protection, such as the importance of cyber coverage given the significant rise in cybercrime. In fact, the cyber insurance market is forecasted to grow to $97.6 billion by 2032, according to Acumen Research and Consulting. For other products, like boats, it's about educating customers about the advantages of consolidating their insurance under one carrier with their home and auto, which can result in a full suite of protection and a more streamlined claims experience.

But today, many customers either don't have or are unaware of these options, leaving them potentially at risk. According to the 2024 “Munich Re Global Cyber Risk and Insurance Survey," 42% of respondents have no intention of purchasing private cyber insurance, despite rising cyber threats among individuals. This gap presents an opportunity to enhance customer experience, as well as agency retention.

Our internal research analyzing billions of dollars in premiums shows that accounts with three policies have a 2 to 3-point retention lift over those with two. Even more impressive? Accounts with 4-plus policies see an even larger benefit, with nearly 98% retention.

Partnering with carriers that offer support in identifying and adding coverage opportunities can significantly benefit agents in growing their business and providing more comprehensive protection for their clients. The best carrier service centers can help by proactively identifying consultative opportunities to optimize coverage solutions.

2) Consulting on loss prevention. In today's market, the advisory role of agents is more important than ever. Experienced agents understand that proactive risk consultation is essential to prevent losses from occurring in the first place. But many customers may not know where to spend their time. In fact, 62% of homeowners didn't check their roof for issues in the last 12 months, according to the Hanover “2024 Home Maintenance Report." By advising clients on home maintenance practices, agents can help significantly reduce the likelihood of common claims. Key areas of focus include roof maintenance and installation of mitigation devices like water sensors and shut-off valves.

Skilled agents offer tailored recommendations by asking thoughtful questions to assess the home's condition and current safety measures. This not only helps customers avoid disruptive losses but also builds trust and gives them a greater sense of control over their risks.

3) Resisting the urge to unbundle. While moving a single policy to save a few dollars may seem tempting, unbundling can have unexpected consequences. Clients may lose account discounts and carriers view customers with bundled policies more favorably because they are less expensive to retain and exhibit stronger loyalty. For agencies, unbundling can mean additional work and an increased risk of losing these customers.

Customers benefit from having all their policies managed by a single carrier, resulting in a more seamless experience. By consolidating under one company, customers can save time by easily contacting a single carrier, and combining policies may result in increased loyalty credits and discount programs. When a customer asks about moving a single policy, it's an opportunity for agents to conduct a total account review, confirm coverage limits meet their current needs and highlight additional protection opportunities.

4) Partnering with financially sound carriers. Financial stability is critical, especially in a volatile market. Customers need assurance that their carrier can respond when it matters most. Savvy agents partner with reliable carriers that can deliver on their promises long-term. In return, carriers rely on agents to write profitable, quality business and help customers mitigate losses.

Knowledgeable agents prioritize strong frontline underwriting to identify potential risks and guide customers toward safer practices. This collaboration helps stabilize prices and control losses, benefiting customers and carriers.

By embracing their roles as trusted advisors and consultants, agents can provide unparalleled value. The independent agent channel is uniquely equipped to guide customers in seeking peace of mind. This is a pivotal moment for agents to make a lasting impact by ensuring customers are well-protected and informed. In a dynamic market, the expertise and guidance of independent agents are indispensable for delivering comprehensive protection and critical insights.

Dan Halsey is president of personal lines at The Hanover.