Independent property and casualty agents face increasing vulnerability and the very real potential for becoming immaterial or irrelevant from forces over which we have absolutely no control. While insurance agencies have always faced threats, technology has turbocharged the pace of change. Can the independent insurance agent industry exist in this new world economic order? We answer with an emphatic “yes,” but not as we know the model today. The need for independent agents to broaden their economic base has never been more evident – and that’s what consumers are clamoring for, as well.

We can’t wait for change to become obvious because by then it’s too late. True leaders are game changers who don’t just adapt to change, they shape it. Each advancement opens up a new world of possibilities, one advancement leads to another, and the faster the rate of change, the deeper and more profound the opportunities.

The agency of the future may not even be an “insurance agency” but, perhaps, an entirely new business model. The agency of the future will:

  • Be more virtual, nimble and dynamic, and less concerned with bricks and mortar. It’s all about meeting customer needs when, where and how they want them met.
  • Offer multiple services, broadening and deepening its economic base. The new equation for success is one with a broad base.
  • Push the envelope of innovation to create competitive advantages and generate intellectual capital.
  • Drive economies and create scale to drive down the cost of doing business and deliver more services with the same dollars.
  • Be committed to a continuous (perpetual) improvement process.
  • Develop human capital with bright, energetic customer-focused employees who readily accept and embrace change.
  • Delegate/offload/outsource non-mission critical functions/workflows to drive efficiencies, maximize resources and focus on what’s really important. Retain only what you must or need to do yourself and delegate everything else to others who can do it faster, better and at a lower cost.
  • Commit to effective and aggressive use of technology.
  • Master data management to continually drive agency metrics. If you can’t do it, hire someone who can. It’s that important.
  • Push the digital marketing envelope.

Most importantly, the agency of the future will have a laser-like focus on mastering the two primary mission-critical functions, which are fundamental to any service business: Producing sales and delivering raving fan customer service.

Agencies of the future must develop new means to market services and increase their sphere of influence. In addition to engaging in the online marketplace through concerted engagement with social media, be sure to cover your “real world” bases through expanded interactions with trade associations, allied service providers and distributors. Focus on deepening your relationships with current customers and finding new opportunities to solve their problems and meet their needs.

About Oak Street Funding

The materials in this paper are for informational purposes only.

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