Every business has strengths and weaknesses, and a SWOT analysis can be a valuable tool to identify areas for improvement or income opportunities, as well as those areas you may be investing too much time or resources for not enough return. While each individual IA has its own characteristics and unique situation, below can get you started in assessing yours:
Strengths. Independent insurance agencies inherently have a leg up when it comes to the communities in which they reside. Agents know their neighbors and local businesses and act as their advisor in a way that competing channels never can. Secondly, they can offer insurance products from several carriers, further differentiating them from the exclusive, or captive agent.
Weaknesses. Do you have a balanced book of personal and commercial lines? Do you have a diversified income stream from property & casualty, life insurance, annuities, and group benefits? Having “all your eggs in one basket” can put your future at risk. Do you spend more time servicing accounts than selling? How is your retention rate? Many independent agents can find ways to improve operationally by using service centers, or incentivizing staff for income generating activities.
Opportunities. Despite disruption and change, opportunities are abound for IAs. The ability to cross sell life and financial products is overlooked by many agents. Clients continue to see value in insurance advisory services as emerging risks continue to drive new products to cover cyber threats, homes, online businesses and more. Technological advances have improved efficiencies and led to more business development tools than ever, increasing your ability to meet your clients’ needs on their terms.
Threats. One of the greatest threats to agencies is the commoditization of insurance products as improved technologies and Insurtech startups threaten to disrupt the industry. Diversification of services and adoption of new technologies are strategies every independent insurance agent should consider as they prepare for 2022 and beyond.