In my last few blog posts I’ve described the current state of the P&C industry with particular emphasis on what insurance companies are going to be demanding of agencies with whom they continue to do business. To recap that analysis:
Their record profits mean an incredible increase in capability to improve their loss prediction capabilities. This means less reliance on agents. They are relentlessly focused on expense control, which means they can make money with higher loss ratios. In turn this means lower commissions AND lower profit sharing for agents. Increased competition from non-traditional sellers of insurance means less market share for agents. Finally, carriers who can make money without agent expertise still need, and want, agents for organic growth. So, they are going to increase pressure for growth to maintain relationships.
So, agents who want to survive in the future – let alone thrive – must grow!
This is completely obvious. But the average independent agency doesn’t do that. If you look at the average agency they increase their book of business at about the industries core growth rate of 3% per year. THIS ISN’T GOOD ENOUGH for survival anymore. These agencies have “forgotten” how to grow!
So, in the next month’s blogs I’m going to lay out a game plan, a recipe if you will, that ANY agency can implement easily to ramp up growth!
Let’s begin with commitment. If you truly want to survive, and thus grow your business, you must make a commitment to do it. A commitment means it is something you are going to do no matter what. It means that growth will happen before anything else. It means you will absolutely do what it takes.
Are you willing to commit the time, effort, resources and patience to grow?
I think this deserves serious consideration. Growing a business is not a simple, or easy, thing to do. It does take work! It’s easy to say you want it, it’s another thing to persevere through to success.
As you think about whether you want to make the commitment consider that if you don’t grow your agency significantly over the next few years you will likely not survive. If you can’t make the commitment then may I make a suggestion?
Today is the best time, from a financial point of view, to sell an insurance agency in a generation. Get out now while the getting is good!