On the Radar for 2008

It’s that time of year — predictions about everything from the economy to politics run rampant with a new year. Predicting the future is never easy. But there are some issues facing the independent agency system in 2008 that are a sure thing. With Congress debating insurance regulatory reform, agency principals retiring at a rapid rate and technology changing the face of how agencies do business, the consequences for the independent agency system are large.

1) Advocacy. The new year promises to be another busy one on Capitol Hill. Although Congress will certainly be distracted by the 2008 election, the Independent Insurance Agents and Brokers of American, the Big “I,” will continue working with legislators on the important issues that affect independent agents.

Agent grassroots efforts will be crucial in framing the debate, especially on insurance regulatory reform. The time is now for agents to dialogue with their representatives in Washington to show their support for a pragmatic approach to regulatory reform that would modernize but keep the state-based system.

Agent licensing reform will be a big issue in 2008, as a bill is introduced in Congress to bring uniformity to non-resident licensing. Natural disaster proposals, flood insurance and tax issues are likely to receive attention as well. And, of course, the outcome of the 2008 election will have a huge impact on agent issues going forward.

2) Branding. In a time when captive carriers and direct writers are spending unprecedented amounts of money on marketing, independent agents and independent agency companies must separate themselves from other insurance-buying options. One way to do that is with an effective branding campaign.

With more than 10,000 agency locations and 42 companies, the Trusted Choice branding program is positioned for growth in 2008. In 2008, Trusted Choice will hit the airwaves on Fox, The Travel Channel, CNN and The Weather Channel, as well as continue to promote tag-able TV, radio and print ad materials that agents can customize and use in their own media markets. The coming year will also bring a renewed focus to “live the brand.” The recently redesigned Trusted Choice consumer Web site and the “Live the Brand” guide will help agents to better incorporate the brand into the daily life of their agencies. Trusted Choice agents sign a written pledge of performance for their customers, and 2008 will focus on why Trusted Choice agencies are a cut above the competition.

3) Real-time. More agents are adopting the real-time initiative, supported by the Agent’s Council for Technology, but more needs to be done. Agency principals need to drive implementation of real-time in their agencies and ask all of their carriers to participate.

Real-time enables agents to operate consistently with multiple companies through the agency management system or comparative rater, and represents the “answer” to having to deal with multiple carrier Web sites. Agents can use real-time to rate a policy, make a change, or get billing, policy or claims information. Real-time is about twice as fast as using carrier Web sites; eliminates a lot of duplicate data entry and separate logons; and allows the agent to answer the customer’s questions on the spot. The Big “I’s” recent best practices study confirmed what we already knew — agencies that effectively use technology are more profitable and better positioned to compete.

4) Workforce recruitment. How will we recruit the best possible workforce in the next decade? At the Big “I”, the Invest and Young Agents programs are working to insure that the industry continues to attract top-tier talent and to train them once they enter the industry.

Invest provides recruitment and training by offering basic insurance instruction in the high school classroom, as well as in community colleges and vocational schools. In 2007, young agents from around the country met at a leadership conference in San Diego to address a variety of agency management issues, including technology. As an industry, we need to continue to make quality employee recruitment and retention a No. 1 priority if we are going to effectively compete in a crowded market.

5) Perpetuation plans. Today, the average age of an agency principal is 54. The independent agency system will face an unprecedented exodus of principals and producers in the next decade. Is your agency prepared for a transition?

The potential for increased taxes, coupled with the increased age of agency principals, means smaller agencies are at a higher risk of being forced into a merger and/or acquisition. Carriers are nervously watching this trend, wondering what their distribution force will look like five or 10 years from now.

To preserve our markets, we need independent agencies with a perpetuation — and growth — plan for the future. Carriers and consumers know the independent agency system is superior to other distribution channels. We need to ensure that we continue to excel and enhance the value of the independent agency system.

Topics Legislation Agencies Tech