Chris – Thanks for the thoughts and analysis. With 35+ years of insurance experience in multiple roles, I would agree with your general theory, but caution that there were a number of factors that transpired across the insurance industry to create our current state. The evolution of technology, data collection and sophisticated modeling has lead the industry to greater efficiency and rewarded consumers with stable pricing. Unfortunately, as you note, many agencies continue to debate their value for “underwriting” clients, and wish to retain the same compensation formulas that once rewarded a different value proposition. I’m pleased to report that many producers/agencies are going back to focusing on the skill of selling, which carriers are rewarding with growth incentives, rather than profit incentives. This will continue to hold particularly true for commercial and financial services products, where agents can bring added value, but it will also mean they should spend less time selling personal and small commercial products, which consumers can acquire directly on their own. You make a good point on the economics of the carrier, and keep in mind that they have grown surplus during a less than optimal economic market. I firmly believe that there will continue to be opportunity for agents who wish to seek out new customers, but those that want to be rewarded for holding their share will become less valuable.
Nice article. First, ALL insurance agencies are “hard market” agencies. I don’t know any that can’t or don’t really thrive when t”hard market” agency is a LAZY agency who waits for things to turn their way. They just haven’t had it turn in about a decade. One of the most important factors in the difficulty in getting growth going is not addressed. That is the complete lack of economic growth since about late 2007. This, more than any other condition, hurts agencies the most. Like any business we must have, both inside and outside an agency, inertia, forward momentum and positive economic events. And, even with Trump as president and many Republican governors and state houses, we have been able to catch fire economically. If that continues expect such agency stagnation that we will all end up selling and working for just a few major entities in the insurance agency biz.
Chris – Thanks for the thoughts and analysis. With 35+ years of insurance experience in multiple roles, I would agree with your general theory, but caution that there were a number of factors that transpired across the insurance industry to create our current state. The evolution of technology, data collection and sophisticated modeling has lead the industry to greater efficiency and rewarded consumers with stable pricing. Unfortunately, as you note, many agencies continue to debate their value for “underwriting” clients, and wish to retain the same compensation formulas that once rewarded a different value proposition. I’m pleased to report that many producers/agencies are going back to focusing on the skill of selling, which carriers are rewarding with growth incentives, rather than profit incentives. This will continue to hold particularly true for commercial and financial services products, where agents can bring added value, but it will also mean they should spend less time selling personal and small commercial products, which consumers can acquire directly on their own. You make a good point on the economics of the carrier, and keep in mind that they have grown surplus during a less than optimal economic market. I firmly believe that there will continue to be opportunity for agents who wish to seek out new customers, but those that want to be rewarded for holding their share will become less valuable.
Nice article. First, ALL insurance agencies are “hard market” agencies. I don’t know any that can’t or don’t really thrive when t”hard market” agency is a LAZY agency who waits for things to turn their way. They just haven’t had it turn in about a decade. One of the most important factors in the difficulty in getting growth going is not addressed. That is the complete lack of economic growth since about late 2007. This, more than any other condition, hurts agencies the most. Like any business we must have, both inside and outside an agency, inertia, forward momentum and positive economic events. And, even with Trump as president and many Republican governors and state houses, we have been able to catch fire economically. If that continues expect such agency stagnation that we will all end up selling and working for just a few major entities in the insurance agency biz.