Several major issues affecting the insurance distribution industry create a challenging landscape for brokers looking to sustain growth and create value for their firms. In 2023, the U.S. endured 28 catastrophic events that cost at least $1 billion each. The economic environment of high inflation, high interest rates, and tight labor market continued to push in on this industry. This has created a hard market in which clients have endured significant and ongoing rate increases. As an insurance broker, you’ve also experienced shifts in carrier appetite and non-renewals as carrier partners work to level their profitability. These are all uncontrollable conditions that everyone must navigate.
However, some factors can be controlled, leading to predictable growth, even in a challenging environment.
Take Advantage of the Controllable Factors
In challenging environments with uncontrollable circumstances, firms need to take a closer look at those things they can control, evaluate their current strategies, and be willing to shift course. Here are some ways insurance brokers can take advantage of those factors that are controllable:
- Be proactive, not reactive in client relationships. Call your clients and educate them on what’s happening in the markets, including how you plan to support them. Prepare them for price increases before they call you. Coach your staff on how to convey bad news and communicate and differentiate your offer’s value. Remember that as an independent agency, you’re a trusted advisor. Communicate like one.
- Positively impact client’s rates. Insurance costs can never be low enough for your clients; sometimes, this factor is out of your hands. But there are things you can do to try and improve their price. Look at the carrier, specific policy, or overall coverage to decide which area to tackle. If it turns out your client does have the best option for them, prove it. Show them you shopped around, and they get the best value coverage.
- Increase quote volume. Higher quote volume comes from increasing your market presence, but that’s often easier said than done. Identify carriers that have products most closely aligned with your customers’ needs. Carriers look at agencies that benefit them the most, so make sure you have data and reports demonstrating your business’s health and growth opportunities. Getting access to the right markets enhances the options you offer to clients, leading to better sales and, ultimately, growth for your business.
- Drive improvement in your culture. Communicate your firm’s vision and get buy-in from your staff, provide development opportunities, and invite transparency. Most importantly, instill a growth-minded culture. In growth-minded cultures, teams embrace change, refuse to settle for good enough, and relentlessly pursue goals. Are you running an agency where the next generation of talent would want to work?
- Use data to make decisions. Regular data review can uncover trouble spots, identify at-issue trends, and create solutions quickly. Data, like carrier production reports, policy-in-force (PIF) count, sales velocity, and origin of organic growth can all be considered. More importantly, after gathering and reviewing all this great data, select focus areas and create targeted action plans based on your findings. For example, are there niche markets or specialization opportunities to expand your business?
- Implement technology solutions. Competition for the independent insurance agency is fierce, but investing in advantageous technology is one way to get ahead. The right tools can help optimize efficiencies, drive sustainable growth, and create business intelligence that enhances your agency’s evolution.
- Use an agency network. A network can support agencies wherever they are on their lifecycle journey and what they hope to achieve next. FirstChoice, a MarshBerry company, can help with growth and talent resources, coaching, and sales training, vetted technology, and relationship-building tools.
When you consider everything impacting your business, it may feel overwhelming. Remember, organic growth is a gradual yet deliberate process. With the right mindset, goals, and support processes, you can overcome the hurdles, both controllable and uncontrollable. Do this effectively, and you’ll have engaged employees and clients and strong performance.
Choose FirstChoice for Organic Growth in Unstable Positions
FirstChoice has a proven track record for addressing challenges in both controllable and uncontrollable conditions. Solid educational programs are available to support you from creating your strategic plan and goal setting to talent acquisition and succession planning. We meet our agencies where they are, from infancy to perpetuation or final sale.
