It’s hard to read the headlines without thinking about the future of your agency. Many agencies wonder what business will be like over the next 12 to 24 months. Due to the soft marketplace over the last couple of years, insurance agencies have already had to create plans to address lower premiums—and thus, lower revenues.
Premium reductions continue to average about 12%. As sales volumes are reduced and as businesses cut back on payroll, you can expect further reduction in premiums. I am not an investment wizard, nor can I predict the future. Still, it seems likely that agencies will continue to see reduced revenue over (at least) the next 12 to 18 months.
This may sound like doom and gloom, but it’s also an opportunity to face the situation head-on and create a plan to survive these difficult times.
Following are a few suggestions to get you thinking about how to create a strategic plan that will move your organization forward during the next 12 to 24 months.
Communicate with clients: Many of your clients have the same concerns as you about how current economic conditions are going to affect them. Now is the time for you to be proactive. Provide extra information and services that will help them manage their businesses better. Partner with a local CPA to provide a seminar on cash flow management. Seek companies that can help your clients with their marketing programs. Basically, do anything possible to let your clients know that you’re an advocate for them. This will go a long way to build loyalty with your clients.
Marketing: Acquiring new clients has always been an important part of running an insurance agency. Now, it’s even more so. Explore new target marketing niches. Explore new marketing tools that are available, such as using the Internet to attract prospects and look for new revenue sources. Agencies that continue to foster a sales-focused mindset seem to be able to grow regardless of current economic conditions.
Back office: Make sure that you are as effective and efficient in your back office operations as possible. Concentrate on getting any technology projects that are currently underway finished as soon as possible. Utilize all the tools available to streamline operations. Don’t allow staff’s resistance to change to derail projects.
Staff training: This is one of the least expensive options available. Make sure your staff is fully trained to use your existing hardware and software systems.
While times are certainly challenging, independent agents have shown again and again that they are resilient and can weather most storms. It won’t be easy. But continuing to maximize your technology investment will go a long way to help you weather the storm.
You must be logged in to post a comment.
November 24, 2008 at 8:25 am
Great Post!
I hate regurgitating Seth Godin on blogs but here is a good one: “Change (and the fortunes that go with it) is almost always made during the down part of the cycle. It might not be fun, but it’s exciting. (Where do you think Google came from?) The opportunity is to find substantial opportunities (in any field) that deliver real value and have a future.”
If you think this means more people will buy from a Direct Firm like Geico you’d be wrong. “trust” will be the commodity in the years ahead.