In my last blog, I quoted Jeff Bezos, CEO of Amazon, regarding the future. Taking a cue from him, I expressed great optimism in the future of the insurance agency business! And I’m putting my resources behind that belief by investing in brand new insurance agencies: 25 so far this year.

As optimistic as I am, I also strongly believe that agents, and agencies, will need to be much different over the next decade than they are today to survive and thrive. I’ve written here a lot about what I think that looks like (please feel free to use the search feature for blogs on this or other topics). Safeco Insurance Company has recently released a white paper based on their research about what it will take to be successful as an agent in the future. It’s available for download here:

Read Safeco Insurance’s report: What it Takes to be an Agent for the Future, by clicking on this link.

Here are some interesting, and salient, points raised in the report:

– The responsibilities of producers and CSR’s are merging. CSR’s will be less involved in routine servicing and more involved in selling (which implies a different set of skills will be needed).
-CSR’s will need to be able to sell multiple lines of business and answer questions without passing a customer to someone else.
-Agents will need to embrace online account management and self-service (two of the top demands of millennial customers).
-Owners need to learn how to effectively hire and manage millennial employees (58% of all new agency hires are millennials).
-A growth focus will be required. Agencies that define themselves as “service” organizations as compared to “sales” organizations will have more difficulty.
-Agents are embracing technology: 60% use e-sign, 61% provide online quotes and 60% text with clients.
-Technology is critical to hiring millennials (81% say the kind of technology offered by an employer affects their decision making according to a Dell study).
-Agents need to rethink their position on after hours and weekend availability as only 56% of agents plan to offer what customers are demanding.
-17% of the U.S. population are Hispanic and this segment is growing yet only 14% IA’s surveyed by Safeco believed that this growth could have an impact on their business.

There is a lot more and I encourage you to read the full report. More importantly, though, I encourage you to think about how the business and consumer are changing and the strategies you want to employ, in order to continue your success into the future. No agent has to do everything, and none of us has to do it all at once. The key is to pick one area to improve, make it a focus, add it to your business and then pick the next one. What is your first step into the future going to be?

(AP Photo/Ted S. Warren)

I’d like to quote the founder and CEO of one of the world’s largest and most valuable companies:

“I very frequently get the question: ‘What’s going to change in the next 10 years?’ I almost never get the question: ‘What’s not going to change in the next 10 years?’ And I submit to you that that second question is actually the more important of the two – because you can build a business strategy around things that are stable in time.”

There is a great deal of angst in the insurance business over what the future will be like.  Many even worry about the survival of the local independent agent as a species!  Perhaps this is why people who work in our industry are headed for the exits in unprecedented numbers (60% will “retire” in the next 7 years according to one estimate).  I’m not one of those.

I think Bezos’ second question ought to make all of us stop and think.  Here is what I believe will not change in our industry over the next ten years:

  • People will still need insurance because fires, tornadoes, hail and accidents aren’t going away.
  • Insurance companies will still need to sell it (and they aren’t going to be replaced by tech startups).
  • People will still need advice and want to get it from someone they trust (and not an algorithm).
  • People will still want to pay as little as possible for what they need.
  • People will want increasingly to deal with insurance, as everything else, when convenient to them.

I’m as bullish on insurance as Bezos is on groceries!  I believe that agents are still going to be needed and that customers will still want great service, low prices, choices and someone to put them back together again after a disaster.

How all of that gets delivered is going to change, and we need to continually evolve our businesses as new technology and changing customer demands require it.  But we’ll still be here.


In my last two blogs, I have written about how long it takes to become an expert at something.  According to Wharton Professor Adam Grant it takes 10,000 hours.  Years in fact.  I have also noted that this meshes with my experience as a commercial insurance specialist.  But, as I have also pointed out, proficiency until mastery comes is what allows us to make a living, be successful and serve our clients well.

Proficiency, though, requires practice.

Actually so does mastery.  It’s interesting I think that lawyers work in a “law practice” and doctors, no matter their experience, “practice medicine”.  They also continue to train in their profession.  As I write this I am awaiting my instructor for a day of “recurrent” training in my airplane.  Pilots too must train and practice to maintain and increase proficiency.

While I wait, I’m a bit nervous.  Am I as proficient as I hope I am?  While not a test, I know the day will reveal any weaknesses I have.  On the other hand I am looking forward to the experience because I know I will learn some new skill, hone my ability in other areas, and be better when I leave than when I started.  This is what I think a professional in anything does. Practice to proficiency.  Work on making continual progress on developing skills and hope to eventually to demonstrate the mastery of the expert.  At my training, I know we’ll also review accidents.  All of the accidents we review will be pilot failures where practice and proficiency were ignored.  Even by experts.

Those who want to become successful insurance agents and agency owners don’t need to wait to become experts.  But they must practice to gain and maintain their proficiency just as other professionals due. Unfortunately, I frequently see agents who just “wing it” and hope for the best.  Effective practice requires a plan, a briefing of what is to be done and a post practice review and evaluation.  This is what pilots do before every flight and what other professionals due each time before “practicing” their craft.  When they become “expert” they may forgo the checkList in favor of a flow but never the planning, practice Itself or the review.

How about you and your agency?  Are you already an expert or working your way to proficiency? Regardless of your development I encourage you to continue your practice!


One of the things that always provides amusement, for older people, is to hear children plan to do something difficult and complicated.  Their plans are always simple and underestimate the difficulty and time required.  This is because children are natural optimists!

I find that insurance agency entrepreneurs are also optimists, and occasionally share the lack of understanding of the difficulty of doing things that our younger selves did.  This is a tremendous advantage for them because it allows them to try things, and become successful, when others are fearful.

For example, the successful personal lines producer, who sees greater opportunity and income in commercial lines, often underestimates the complexity of the business, and thus, the time required to master it.  The good news is that mastery isn’t required for success!  As I noted last time, mastery seems to take about 10,000 hours of practice, which can take many years.

Proficiency is required to achieve success.  While less costly in time and money to obtain, it isn’t cheap or inconsequential.  Proficiency can be defined as, “a high degree of competence or skill.”  To acquire proficiency in anything requires effort.

I spoke to a highly intelligent and driven young man, several years ago, who wanted to immediately begin his career in insurance as an agency owner specializing in commercial insurance.  I pointed out that all professionals require a great deal of training and usually a lengthy form of apprenticeship before being able to competently work in their field.  As examples, I pointed out doctors, lawyers, and engineers, all of whom study for years, and then work under close supervision for many more years before working independently.  Only when they achieve proficiency are they free to go their own way.

In my experience, commercial insurance is similar.  A talented person can make a living in commercial insurance from the beginning, even though they aren’t skilled or proficient, just as a young doctor can earn a living doing simple tasks while learning the complex.  The difference is that the doctor is supervised in his lengthy training by other doctors whereas the young insurance agency owner may only be supervised by his unsuspecting customer!

Our business is a profession, and requires that we exercise due care to calibrate our business to our knowledge and ability, not to do harm to our customers through unnecessary mistakes.  As we gain proficiency we can work on increasingly complex risks, but we do our own development, and our customer’s finances harm, when we work outside our own proficiency.

Expertise in the field of commercial insurance takes at least 10,000 hours to develop.  Proficiency in a limited area of the field may only take a few dozen hours.  Luckily, we can build an income, and a business, by being proficient in limited ways until we are able to become expert in many!

the beatles

Insurance is very complicated.  The first time anyone tries to read an insurance policy that becomes immediately and dramatically obvious.  Commercial insurance, as a specialization, is much more difficult to understand and master, than personal lines. Virtually, everyone in the insurance agency industry believes this, and those that don’t, find out very quickly that it is when they try to enter into the business of selling it.

As I reflect on my early career as a commercial insurance producer, I have often thought that it took me about five years before I began to feel reasonably competent.  Speaking to colleagues, they all report a similar period of time during which they believed they weren’t quite ready for prime time.  As an agency owner I have learned that customer service agents take a similar amount of time to become really expert at what they do.

Now, insurance is complicated, but what is it about five years that seems to be our common thread?  In his new book “Outliers” Wharton Business School professor Malcom Gladwell provides the answer.  It seems that to master any complex skill, whether it is athletic, academic or professional, requires the average human being about 10,000 hours of purposeful participation.

Gladwell gives a lot of examples of this, one of whom is the rock group the Beatles.  In Gladwell’s telling, it took the Beatles seven years and 10,000 hours of performing to break through.  They were able to amass those hours in only seven because of an unusual set of circumstances.  Similarly, some insurance people are able to gain mastery in 5 years, and for others it takes much longer.

The implications for this, in our work and staffing, are many and interesting.  I think an understanding of the time required, gives us perspective on how to judge our performance and progress.  It also helps us understand the true value of the experienced team member.  Hopefully, it serves as a cautionary note to the over confident who want to charge into the business without adequate preparation.

Clearly, it takes a long time to really master our work, but that does not mean that we cannot be good at it in the meantime.  There is a difference between mastery (being an expert) and proficiency (being a professional).  Mastery isn’t required for success, but proficiency is.  More on that next time.



I’m a committed believer in the value of benchmarking operational results, and comparing them to the results of other similar businesses. I’ve written about that many times, but essentially the idea is to answer the question, “is my business running well or not?” To answer that question in a realistic and helpful way, the second question should be, “compared to what?” That is where industry benchmarks come into play. They answer the second question, and allow the business owner interested in improving performance to compare his/her business against peers.

This exercise, in and of itself, is incredibly valuable because it can highlight areas that may need attention.

It may also be in comparing your business to others, you see an anomaly, but the cause isn’t immediately apparent. Now what? This is where inviting other business people, in a similar business(es) to look in detail at certain parts of your operations, may be very helpful.

Recently, we had several key people, from a similar business in a different part of the country, visit us to “audit” our operations. I wanted to try to better understand how good a job we were doing, where we might improve, and perhaps return the favor by allowing others to learn from us. In my invitation, I was clear that no question was off limits, everything was available to see, and our employees should cooperate as fully as possible.

This takes a willingness to be humble! After all, you’re essentially parading naked down Main Street, in a metaphorical sense.

The results of the visit we had over three days were extremely helpful to us, and allowed us to better understand the impact of our operations on our numbers. We got a lot of great ideas for improvement and had meaningful conversations on a range of issues that affect our business. Yes, the debrief required a lack of defensiveness, but the learning was outstanding. Our colleagues also benefitted as they learned some new ideas as well. It was a tremendous win for everyone.

Have you ever tried something like this? If not, I hope our experience is motivating to you. With a properly prepared, “non-disclosure agreement” and colleagues who are not competitors, you can’t lose! Benchmarks may tell you something could be better. Going beyond benchmarking can show you how.


A few years ago someone close to me was having a lot of issues with a problematic employee.  This employee had gotten really difficult to deal with and become really unpleasant.  My friend resolved to have the unpleasant fix-it-or-go conversation when his employee blurted out, “I’ve been stealing from you for years”.  Now he knew where the attitude problem came from.  Stress from stealing.

But the problem was bigger than attitude obviously.  As he dug in with a hired CPA he discovered that the amount stolen from him was huge, and the covering of tracks by his employee very clever. The thefts didn’t bankrupt his business, but they did hurt it severely.  As it turned out, much of the thefts could have been prevented with some fairly simple internal controls.

Small businesses have trouble with segregation of duties.  Often they only have one bookkeeper who may perform those duties as one job of many.  Certainly most small companies don’t have multiple people in accounting.  So, they fail to segregate.

Here are some basics.  You need to segregate who agrees to buy things from the person who pays for them.  And you need to segregate who balances the check book from who writes the checks.  If this means the business owner has to be one of those people, or a part-time out-sourced service has to be used, that’s better than being stolen blind like my friend.

Another basic that gets ignored often is requiring people who deal with your money to take at least one full week off a year.  That means a total of nine days.  Being gone that long allows things to show up.  Not everything will, but it makes the job of covering tracks harder.

There are other prudent business practices everyone ought to engage in, but most do not.  Those who don’t are just an employee personal problem away from serious financial harm.  It’s worth asking your outside CPA for counsel on.

I can remember watching TV commercials as a kid featuring Ron Popeil and his amazing kitchen gadgets, and commercials for Ginsu knives with fascination.  Not only were the products amazing they also seemed a bit unbelievable.  They did so many things for so little money.

Of course other people were suspicious too and that was why these products always offered “free gifts”.  The free items were there to enhance the already incredible value.  But they were also there for an even more important reason: risk reversal.

One of the problems all marketers face is how to get potential customers to take the risk to buy the products they are selling.  People don’t want to waste their money and they are skeptical.  One of the smart marketers deal with this is to reverse the perceived risk by not only offering money back guarantees but actually making people better off, even if they don’t like their purchase, with items of value they get to keep.  Thus, “if you don’t like it return it for a full refund – but keep the knives as our gift” tag line of all those early TV commercials.

This is powerful!  The question is how can insurance agency owners make use of it?  After all rebating premium, or giving gifts worth very much, is usually against the law.

One way to do this is to develop a basket of services, or inexpensive goods, that you provide to new customers that come with every new account.  Even if the customer is unhappy later they get to keep those things.  I’ve seen this work as a real value add in agencies.  You don’t have to spend a lot of money to put things like iTunes gift cards, electronic devices, vouchers for restaurant meals and similar things in your basket.  Promote its value and let people know that even if they try your agency and don’t like the experience they can “keep the knives”.

There are lots of ways to reverse risk, and it’s still an important psychological marketing tool even to today’s sophisticated consumers.  What ways can you think of to reverse risk?


ideas-twoIn my last post, I talked about the reluctance of many to share, contrasting it with what a mindset of abundance can do for those willing to share.  My thesis was that giving things away, instead of always trying to see how much you can get for them, can lead to greater prosperity.  In this post, I’d like to tell you about one of the ways I am putting my money where my mouth is.

I decided to start a new company because (what else!) I saw a need.  The need was for our member agencies to be able to make more money on some of the business they write.  As I worked on the pro forma I was conservative in my estimates but projected a 35% annual growth rate for the business.  In reviewing my numbers with our CFO, he pointed out that if we could get to our 5 year revenue estimate in the first year we’d make a lot more cumulative profit over that period.  Duh!

I was challenged.  How could we grow the revenue that fast?

My thinking centered on how we could make this new company’s product absolutely irresistible to those who use it and sell its services.  After a lot of thought, and tinkering, I decided to create an industry best compensation program and, in addition to that, give half of the net profits to those who use and sell the product.  That would let me cover our costs, make a reasonable return on capital and be irresistible in the bargain.  It would let us become true joint venture partners with our customers and sellers without their needing to make any investment or take on any risk.

So, that’s what we’ve done.  In the first three weeks since we launched, we’ve booked 300% more revenue than my original forecast!  And we’ve arrived about where I thought we’d be at the end of year 5!  In addition to that, we’ve only marketed to about one third of our prospect base – so we have every reason to expect our first year numbers to blow our wildest dreams away.

I’ll be the first to admit that the results we are seeing far exceed what I expected.  But I did expect something remarkable to happen.  Sharing opens up the possibility that the part that you keep can be much bigger than what you would have had if you had kept the whole thing.  In my experience the same thing happens when you share ideas as well as profits – they multiply – and you’re richer for having donated your wisdom to others.

To some this probably sounds crazy.  But I’d like to challenge you to think about what you have that you can give away, or share with others.  What are the possible positive outcomes for your business?  I believe they are virtually unlimited.


Do you have any problems in your business right now?  Of course, you do.  There are always problems!  I was talking about that this afternoon with a very experienced consultant who has worked with a lot of business owners over her career.  And as we talked about this it occurred to me that those who become truly successful as business people tend to overlook their problems.

On the contrary, I’ve noticed that many people seem to go from one problem to the next.  Often solving one thing brilliantly before moving on to another.  But as they go they are constantly focused on problems.  Often they are frustrated and sometimes, it seems, perpetually so.

Others seem to almost glide past the temporary difficulties of life, and business, in an almost glib or cavalier fashion.  Serious people may even look at them with a certain disdain for their seeming carelessness.  Yet, these people seem to do very well.

I think the difference is vision.

Some seem to focus only what is right in front of them and when that is troublesome what they see is trouble.  Others have focused their attention on the future, and while potholes appear in their path, they don’t focus on those rather keeping their gaze far out in front.

The difference is a bit like landing an airplane.  When you first begin to learn to fly, and land, an airplane you are taught to focus your eyes at the far end of the runway and not the part closest to you.  This is the key to a successful and smooth landing.  When you forget that and look where you’re landing you tend to bounce, skitter and slide.

Like landing an airplane, keeping the long view in sight is important to running a business well.  It is what keeps the little bumps that are normal from becoming the focus.  There are always bumps but they will be smaller, and less impactful, if you are looking at the future instead of the present.

When you find yourself beset with trouble, and it seems that your days are filled with problems, try looking down the runway to the end and see if things just don’t go a whole lot smoother.