As business operations begin to stabilize since the emergence of COVID-19, insurance agency owners are beginning to assess what effect the pandemic will have on their future. For some, this has been an awakening – exposing vulnerabilities in their approach to doing business. Others were better prepared, having made investments in technology early on, allowing them to quickly pivot, and stay connected to their clients. All agencies should be reassessing how they will adapt and grow profitably in the days ahead.
While many independent insurance agencies have fared well through the first three months of the pandemic, the fallout from COVID-19 could be felt for many months (and years) to come. Small businesses, including IAs, that are overly reliant on one income stream are looking at diversification as a strategy, giving priority to where the need is increasing to offset the attrition in those business sectors where the situation is unstable.
- With an estimated 7.5 million small businesses at risk of closing, agents with books heavy in commercial lines are anticipating a widespread decrease in renewals. Many are already seeing this.
- The leisure and hospitality industry has been severely impacted, and when the Paycheck Protection Program (PPP) runs out, the numbers of restaurants permanently closing is expected to increase dramatically.
- Carriers have reported an increased consumer interest in life insurance, particularly term products.
- Innovation and necessity will lead to new online businesses, home-based businesses, workplace adaptations, relocation and overall disruption.
Is it time for you to take steps to emerge stronger in the long-term?
Successful agents are developing a playbook in real-time to adapt to the dramatic shifts in employment, spending and business profiles. With demonstrated proactivity, operational prudence, and a willingness to adapt, independent agencies have a great shot of emerging stronger than ever.
- Focus on client retention, uncovering cross-selling opportunities and referrals. This requires a concerted, coordinated outreach campaign. If your agency does not have the technology in place to efficiently track and support this, it may be time to invest in the tools to satisfy client expectations.
- Develop areas of opportunity emerging from the disruption. This could include cyber, tech, home businesses, life insurance or any number of areas. Contact your insurance company reps for updates on appetite and what they are writing to gain valuable insight.
- Seek out referral partners in areas such as real estate, attorneys, auto sales and more. Tap your small business clients for help in this area.
- Stay close to your independent insurance agency peers. Many forums exist to share experiences, ask questions and seek guidance.
The independent agency channel will survive this disruption and its economic fallout. Agents who are committed to thinking creatively and making sound business decisions will emerge even stronger.