Was this a reprint from 2008 or something? This guy has some insightful revelation? 10 years too late I guess. Just ask B&B, Acrisure, Assured Partners, HUB, RCS, etc, etc. etc.
Last year, I heard the head of Marsh, Glaser, talk about how technology would always be less important than human talent, the reason they keep acquiring agencies.
But he made the point that the human talent had to be superior to the competition. My experience from inside and outside the broker world indicates that clients gravitate to the individuals with talent, both the producer and service staff, and for most middle market clients, the size of the agency is secondary to the service experience.
There are clear advantages to size in terms of breadth of talent. But a small firm with superior talent in several different areas, such as Cyber risk, workers compensation claims,
and health insurance can still thrive if they focus their production on certain industries where they have superior expertise and with a few very competitive insurers.
The technological advantage is overstated for the big firms. As Glaser stated, those advantages will be short-lived as other tech firms match or exceed what is in the market place and sell it to smaller brokerage firms.
I agree with you, Craig. The ‘future’ that the author predicts will not be good for small to middle market business. Many brokerages have tried to service and retain small business via regional ‘Hubs’, but they end up losing most of it because they can’t and don’t see these people in person.
As long as there are smaller businesses and small middle market accounts, there will be a place for the smaller agencies.
It seems there is an employee contraction going on in the insurance industry; or at least in certain areas. Many insurance companies are shedding themselves of seasoned workers and hiring younger folks. One CEO was even heard, just 2 weeks after basically forcing out many devoted and tenured employees over the half century mark, to say at a corporate meeting, “We’re going to fill this place with young people!”
It seems like the incentives at agencies are not quite what they used to be. Many comp plans are not based on a ‘book,’ per se, but new hires just show up for mostly a salary. probably varies across the country.
Retaining older more knowledgeable workers should be part of a strategy. After decades in this business, I have found a niche in the capacity of training, coaching and mentoring. The younger workers do not have the level of technical product knowledge essential to understanding the core foundation of our business which is coverage. They also tend to want to commoditize our products and produce an endless stream of quotes. Insurance is a vital component of the Risk Management process and just one element of the “total cost of risk”.
This is just about the same thing I have been hearing since I got into the industry nearly 30 years ago. These predictions have just never come into fruition. Keep in mind, I say this fully knowing there are some very small poor performing agencies who are satisfied making close to what am minimum wage worker would make, These agencies are also poorly run, lack technology, but are able to survive because they are in an agency network or tap into the wholesale markets. However there are agencies that are slightly bigger than these agencies who also need the agency network, so it works for the entire group and these agencies are viable. Also keep in mind, technology is the reason why many of these smaller agencies survive, technology is getting cheaper and cheaper, also on the company side they don’t have to spend as much to maintain the smaller agencies (with the help of networks). As long as there are those who want to run lifestyle insurance agencies (no boss, set your own hours, etc) there will be small agencies and so far no side of weeding these out though no doubt some of the one person only shops need to go.
Spot On !!
Was this a reprint from 2008 or something? This guy has some insightful revelation? 10 years too late I guess. Just ask B&B, Acrisure, Assured Partners, HUB, RCS, etc, etc. etc.
Last year, I heard the head of Marsh, Glaser, talk about how technology would always be less important than human talent, the reason they keep acquiring agencies.
But he made the point that the human talent had to be superior to the competition. My experience from inside and outside the broker world indicates that clients gravitate to the individuals with talent, both the producer and service staff, and for most middle market clients, the size of the agency is secondary to the service experience.
There are clear advantages to size in terms of breadth of talent. But a small firm with superior talent in several different areas, such as Cyber risk, workers compensation claims,
and health insurance can still thrive if they focus their production on certain industries where they have superior expertise and with a few very competitive insurers.
The technological advantage is overstated for the big firms. As Glaser stated, those advantages will be short-lived as other tech firms match or exceed what is in the market place and sell it to smaller brokerage firms.
absolutely excellent post. Very informative. Thank you for sharing your experience.
Thanks.
I agree with you, Craig. The ‘future’ that the author predicts will not be good for small to middle market business. Many brokerages have tried to service and retain small business via regional ‘Hubs’, but they end up losing most of it because they can’t and don’t see these people in person.
As long as there are smaller businesses and small middle market accounts, there will be a place for the smaller agencies.
It seems there is an employee contraction going on in the insurance industry; or at least in certain areas. Many insurance companies are shedding themselves of seasoned workers and hiring younger folks. One CEO was even heard, just 2 weeks after basically forcing out many devoted and tenured employees over the half century mark, to say at a corporate meeting, “We’re going to fill this place with young people!”
It seems like the incentives at agencies are not quite what they used to be. Many comp plans are not based on a ‘book,’ per se, but new hires just show up for mostly a salary. probably varies across the country.
Retaining older more knowledgeable workers should be part of a strategy. After decades in this business, I have found a niche in the capacity of training, coaching and mentoring. The younger workers do not have the level of technical product knowledge essential to understanding the core foundation of our business which is coverage. They also tend to want to commoditize our products and produce an endless stream of quotes. Insurance is a vital component of the Risk Management process and just one element of the “total cost of risk”.
This is just about the same thing I have been hearing since I got into the industry nearly 30 years ago. These predictions have just never come into fruition. Keep in mind, I say this fully knowing there are some very small poor performing agencies who are satisfied making close to what am minimum wage worker would make, These agencies are also poorly run, lack technology, but are able to survive because they are in an agency network or tap into the wholesale markets. However there are agencies that are slightly bigger than these agencies who also need the agency network, so it works for the entire group and these agencies are viable. Also keep in mind, technology is the reason why many of these smaller agencies survive, technology is getting cheaper and cheaper, also on the company side they don’t have to spend as much to maintain the smaller agencies (with the help of networks). As long as there are those who want to run lifestyle insurance agencies (no boss, set your own hours, etc) there will be small agencies and so far no side of weeding these out though no doubt some of the one person only shops need to go.