How Agencies Can Win in 2023 and Beyond
How Independent Insurance Agents Can Shine in 2023's Chaotic Environment
Moving into 2023, independent agents who wish to grow will have to adopt different mindsets than in the past. As carriers continue to tighten risk guidelines, implement cancellations and rate hikes, and reduce appointments, they will look to partner with growth-oriented agencies. Understanding carriers’ priorities and keeping those things top-of-mind will benefit agencies wishing to take advantage of this cycle for growth. The current environment is actually an unprecedented opportunity for independent agencies to shine in terms of serving as a mentor and advisor for their customers. Especially in the commercial space, changing rules, laws, regulations, and the changes they’re having to make in terms of service to their own customers, have made the need for guidance greater than ever.
Consumers who have sought this expertise and advice have shifted their mindsets to quality over price-based purchasing. They understand the value of their insurance advisors because they’re witnessing it firsthand in harder times, which has put independent agents in a position to demonstrate their strength in this arena.
“I think the most successful agents in this period have maintained a growth mindset. They've been really focused on remembering that in chaos, there's opportunity. How do we really demonstrate the superpowers of independent agents? And that's the ability to provide ease of doing business, choice in terms of breadth of offering, and custom-tailored advice. Independent agents have had a really unique opportunity to demonstrate what sets them apart from any other business and we truly believe there's no better way to purchase a quality product than through a trusted adviser. So, agents really looking at the opportunity available to them despite the environment being pretty chaotic, has resulted in them telling us, ‘We had record growth years in the last two years,’” said Asher.
Digital Tools for Agency Growth
Given the statistics mentioned in this article, what steps should agents be taking to invest in their future from a digital standpoint? The three digital tools the report found associated with the highest growth rates in agencies were Online Quoting, Self-Service Portals, and Live Online Chats. For agencies looking to invest in technology and considering implementing more digital options, those three are a good place to start.
Agents must now be set-up to be able to work from anywhere, anytime. With constantly shifting and varying rules and regulations between states, consumers expect to be able to reach their agents and companies with very little effort, and without much of a time delay. They expect options to be able to connect remotely versus face-to-face. Flexible options for payment and communication are a necessity to survive in the new digital world. Be prepared for disruption and be prepared to provide service in new and more convenient ways.
Embracing Diversity and Flexibility in Talent Acquisition
In addition, adopting digital tools and technology to support work from home opportunities will be increasingly important in the realm of talent acquisition. Younger workers have a higher expectation of being able to work from anywhere, and are increasingly looking for flexibility with time, workload, and pay. Allowing this flexibility is increasingly attractive to job seekers – especially in an industry that is 24/7 service-related. Offer mentorship programs, offer competitive pay and benefits, be flexible, and create a culture of value and belonging to attract the best job candidates.
Consider diversifying your agency’s staff to be able to reach a more diverse consumer base in your community. “Diverse producers, producers that have different networks, different connections, different centers of influence in your community can help bring in additional growth to an agency,” said Asher. And so that's one area we're leaning into a lot. Again, I mentioned Agent for the Future is our thought leadership platform for agents, but we're focusing in on that because we think diversity, equity, and inclusion is going to be an increasingly important part of an agent's culture. In a related area, as we look at female representation for agency owners, it's pretty interesting when you look at the demographics of the channel. It's a channel that is largely female. In fact, if you look at it by role, CSRs are predominantly female. If you look at producers, it's pretty 50-50. But then when you get to agency ownership level, we just don't see the same level of female representation.”
In addition, agencies trying to deliver exceptional service and value to their customers need to be thinking about perpetuation plans, especially from within their own agency, which can be an opportunity to promote and diversify.
Thriving and Surviving in 2023
Don’t fall into the trap of thinking you’ve been in the business long enough that you’ve seen it all, or that you have all the answers. This industry is constantly evolving and will continue to do so rapidly over the next several years.
“It changes so incredibly fast that even if you've been in business for a long time, you've got to keep learning. You have to be willing to continue to try new things, which means taking some risks, which means investing in technology and new ways of working. Being willing to take some risks and try new things absolutely critical,” added Asher.
Diversify your agency and your offerings. Be willing to reach people in a way that lets them know you’re thinking about their needs differently from other agents, and you value what’s important to them. This is a new world and new generation, adopting much different lifestyles which automatically changes their needs from insurance perspectives.
This year has seen the digital adoption trend slowing from its peak during the pandemic – likely due to our “return to the office” migration. In late 2020, agencies who said they planned to invest in digital tools as a part of their agency growth strategy grew by over 10%, but by late 2021, had dropped back to pre-pandemic levels. This could prove unfortunate, as consumers’ digital habits are clearly here to stay.
Regardless of your agency’s goals, or past goals and strategies, digital adoption will be crucial to all businesses as we continue to move into the future. Agencies must adapt with their community and consumer base if they wish to grow. Don’t get left behind or fail to capitalize on your opportunities by failing to put strategies and investments in place now. Make a cohesive and clear plan for your agency to weather the coming changes, and do not fall into the trap of being reactionary. While digital tools aren’t the only thing agencies should be embracing, for those agencies that wish to experience significant growth, there should be a concerted effort to continue this evolution as we step into the future.
“When independent agents invest in digital, they are investing in the future of their business. Digital can create business efficiencies, improve customer satisfaction, and – as this research shows – benefit the bottom line. As agencies look ahead to 2023 and consider how a potential economic downturn may impact business, digital can and should be at the forefront. Now is the time for agencies to invest further and get more strategic about digital transformation to ensure the business is built for resilience.”
– Tyler Asher