6 Things for Independent Agents to Worry About in 2013

By Alan L. Shulman | November 19, 2012

The 100-plus year-old independent agency distribution system is expanding. According to Future One’s “2012 Agency Universe Study,” the number of independent agencies has recently increased to 38,500.

Still, some voices claim that the agency business is past its sell-by date. Yet just because sales are made via other channels, some without agents, doesn’t mean independents are obsolete. There are countless consumers and businesses for independents, captives, and direct marketers to insure, both online and off. The bad news is that your individual agency’s survival is never assured. Here’s what to watch for in 2013.

Digital Marketers

Online marketing is the main reason independents worry about their future. Almost every insurance conference, publication, and vendor berates attendees, readers and prospects about the threat. Digital/mobile marketing is where commerce is headed, but it’s not a panacea for every problem facing independents. Rather, it’s a channel that grows wider every day — but not so wide that all traditional techniques are passe. During the past presidential campaign, nearly twice as much was spent on direct mail versus Internet marketing [Oct. 12, 2012, Washington Post]. So join in the digital conversation, but recognize that online rivals aren’t your only concern.

Recognize that online rivals aren't your only concern.

Aggressive Baby Boomers

The average age of today’s independent agency owner is pushing 60. That means many principals are thinking about retirement. If these baby boomers don’t have a perpetuation plan, then selling the agency to finance their retirement is at the top of their to-do list. If your office is competing with a retirement-minded agency owner, watch out. These guys can be aggressive in building up their book before selling, making them tougher competitors.

Networked Rivals

Agency networks and franchises sign up new members every month. Members gain greater carrier representation and enjoy various support services. Agencies that take maximum advantage of added markets can become local powerhouses of production. A small office can jump from white noise to a cacophony almost overnight.

Retail Rivals

Wholesale clubs, carmakers, and retail chains have promoted insurance sales to their customers for years — via email, direct mail, in-store brochures, etc. But MetLife is now selling term life policies at 200 Wal-Mart stores in South Carolina and Georgia [Oct. 19, 2012, Bloomberg BusinessWeek]. Selling policies off the shelf is a bold move, inasmuch as it’s the exact opposite of digital marketing. If this experiment is successful, what other boxed policies are next?

Multi-Channel Carriers

While some carriers are dedicated to the independent agency system, others employ whichever distribution system generates the most efficient results, as long as it doesn’t overly cannibalize their agency force. Look for continued and potential competition from companies you may represent.

Your Legacy

The agency business is facing endless encroachment from an endless number of rivals and competitive methodologies. It’s the nature of innovative capitalism. So, be innovative back. Grow by being as aggressive and creative as your skill set and budget allows. Make 2013 your smartest, luckiest, and most successful year ever.

image of Alan L. Shulman

About Alan L. Shulman

Alan Shulman, CPCU, is the publisher of Agency Ideas, a subscription-only sales and marketing newsletter. He is also the author of the many tools posted on the Agency Ideas Instant Download Store. Phone: 800-724-1435. Email: alan@agencyideas.com. Website: www.agencyideas.com. More from Alan L. Shulman

From This Issue

Insurance Journal West November 19, 2012
November 19, 2012
Insurance Journal West Magazine

Top Personal Lines Retail Agencies; Assisted Living / Long Term Care; Contractors & Builders

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Latest Comments

  • December 6, 2012 at 4:49 pm
    GregCW says:
    I read Sarah's post and cant see how it got 21 dislikes. She sounds on track to me. I'm facing some of the same issues and hope that I can deal with them to be able to retire.... read more
  • December 5, 2012 at 3:56 pm
    pv1 says:
    I have been in the Insurance Business for 47 years now and I will tell you that , with no exceptions, the first thing to do when anyone--Anyone--- comes into your office to wo... read more
  • December 3, 2012 at 12:03 pm
    FabIns says:
    Sarah,I too have been in the business a long time. My biggest concern is burning good money on bad producers who don't have the killer instinct. Either you got it or you don't... read more
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