25 January 2021

Beyond Fundamentals: How to Scale Your Independent Insurance Agency

Position Your Insurance Agency for Success

Here are three key tips for setting your business up in a way that it’s sustainable and geared for longevity.

1. Have a Stable Book of Business

Stability is vital to the success of every business, including that of independent agents. This starts with having a growing book of business, which is a list of customers you have solid relationships with and who will turn to you again and again for their insurance needs.

There’s a lot that goes into this, but Perk Reichley, president of Ohio-based agency Reichley Insurance, says this largely hinges upon earning their trust and building productive relationships. He highlights some important tips like listening to your customers, interacting with them during times other than policy renewal and taking initiative without being asked.

He notes that in order to build trusted relationships, you always need to have your customers’ best interests in mind — something that often means educating rather than selling. At the end of the day, your primary goal should be to solve their problems and provide them with the exact policies to stay protected without buying coverage they don’t really need.

It’s also smart to refer your customers to other professionals whenever it makes sense. For example, if a customer needs legal advice, you can refer them to an attorney with whom you’ve built a relationship.

As long as you provide real value, your customer retention rate should increase and your book of business should become more stable.

2. Have a Business Built for Growth

Consistent growth is vital for any company, and insurance agencies are certainly no exception. The team at insurance agency management system Evolution Agency says “you don’t have to be the biggest fish in your pond, but it pays not to be the tiniest minnow, either.” Agents who stay small face the risk of being usurped by larger companies who can use economies of scale to gobble up smaller businesses.

So, you need to set your agency up in a way that it can continuously grow and remain competitive regardless of how the insurance landscape may change.

“The best way to bring in new clients is through your existing ones, for a number of reasons,” writes chartered accountant Angie Mohr. “Your current clients know you and most likely have a good sense as to whether their friend or associate would be a good fit with your business. They are also likely to send you clients who are much like themselves.”

Again, this speaks to the importance of treating your customers well and doing everything possible to raise their collective satisfaction level. Pinney Insurance, a full-service life insurance brokerage, recommends developing a formal referral system because it can facilitate a smoother, more efficient referral generation process.

3. Have a Plan For Achieving That Growth

To reach your growth objectives, you’ll need to have an actionable plan and set specific, concrete goals.

“Goal-setting is the first step toward helping you realize your personal goals as well as your agency growth targets, because if you don’t know where you want to go, it’s going to be tough to get anywhere,” explains Dennis Miller at online auto insurance marketplace EverQuote. “Take a few minutes each day to set and write your daily goals and to check in on your longer term goals.”

For example, maybe one of your core objectives is to create a strong digital presence and generate a high volume of leads through your website, search engines and social media. In this case, you would likely want to focus on designing a professional website that’s engaging and user friendly, create content that’s fully optimized for search and become active on popular social networks like Facebook and LinkedIn.

Or, if you want to build strategic relationships with other businesses in your area, such as local interior designers and realtors, you could make it a point to identify businesses with whom you could partner and spend time reaching out to them each week.

Prioritize your efforts and don’t try to accomplish too much at once. Instead, focus on two to three objectives at a time. Once you have those under control, then you can move on and continually improve.

Set the Stage for Long-Term Success

The insurance industry has evolved a lot over the years, with technology having a heavy impact. It remains an industry that’s full of potential, even amidst a volatile economy. In fact, Sam Friedman, insurance research leader at the Deloitte Center for Financial Service, together with colleagues, reports that “the property and casualty sector is building upon a strong 2018 in which the industry saw net income soar 66 percent to US$60 billion.”

By understanding what goes into establishing your own independent insurance agency and laying a firm foundation, you can ensure you get started off on the right foot and set the stage for long-term success.

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