How to Succeed Amongst Tightening Agency Restrictions

CEO Newsletter

As we approach the halfway point of 2022, we continue to see the ripple effects on our industry of economic instability wrought by the pandemic. Although we’ve been seeing indications of a hard market for some time, the state of the insurance industry shows no signs of reversing this trend and it continues to tighten from a risk perspective.

When I first started Smart Choice in the mid-1990s, the industry was in its last true hard market. Agents could not get appointments and lost many key markets for many of the same reasons we’re experiencing currently. We continue to receive an increase in notifications from carrier partners regarding planned rate action and slowing down of appointment access across the country. Inflation is dramatically affecting repair costs, putting loss pressure on our carrier partners’ underwriting margins.

So, what does this mean for independent agents?

These new guidelines and restrictions from the carriers will mean several things for independent agents across the industry:

• Deceleration of new company appointments
• Carriers focusing on agencies that can bring value and results to the company
• Companies tightening qualifications and guidelines on agencies regarding low production, high Loss Ratios, bad retention, and poor quality of business (low limits, credit, prior insurance) 
• Large Rate increases and tightening of class codes, more inspections and audits of books of business
• Carriers will be focused on profitability rather than just new business growth

What you can do to succeed in this market

Prepare your clients for rate increases and counsel them on why and how things are changing. As an independent agent, you will be uniquely positioned to serve your clients better than most captives – especially with the arsenal of market and product options that Smart Choice can provide you.

Regularly engage with the carriers you’re appointed with, and  actively quote and write business with your top partners. 

Take advantage of national incentives, bonus opportunities and contests exclusively available to you through Smart Choice’s top carrier partners. This will boost your profitability and revenue stream and help you compensate for potentially higher business operational costs as well as inflated personal expenses.

Utilize Smart Choice’s programs like Smart Start for assistance placing business and accessing new markets, as well as the Express Markets E&S and Specialty carriers as they will be able to fill gaps in your product suite and provide coverage options for your clients that you may not have through other standard markets. There is a search tool provided to you in our online Agency Business Center if you’re having a tough time placing a certain risk.

Smart Choice will work with all agency partners to understand any new carrier guidelines in advance, and will create plans to manage their books of business to be quality books that are desirable to carriers.

Agencies who can be both profitable and grow, will thrive, and Smart Choice aims to help each and every one of you do just that!

Smart Choice can and will be an enormously helpful avenue for many agencies faced with increasingly restrictive guidelines from the carriers. Our program will be able to provide a number of different options to help you access all the markets you need in the current climate, and agencies who are partnered with a network may be viewed more favorably, as they know we are working together to build profitable, solid books of business.

Rest assured that we are prepared for these challenging waters and are actively making plans to help you navigate these changes and provide the guidance necessary to keep you and your agency thriving and growing.