MARKETPLACE risks they are willing to cover , which can result in a decrease in the number of policies that are available to sell . This can also lead to lower sales and revenue for the agency . Independent insurance agencies may also face increased competition from other agencies as they try to win business in a challenging market . This can lead to lower profit margins for the agency . There are several things that independent insurance agencies can do to minimize the impact of a hard market on their agency :
1 . Focus on providing excellent customer service : Providing outstanding customer service can help to retain existing clients and attract new ones , even in a challenging market .
2 . Build and execute a strong retention strategy : Communicate clearly to your current customers about the market conditions and be proactive in your approach . This is a time when your advice and guidance are key to building a strong relationship with your customers .
3 . Diversify the types of insurance products offered : Offering a variety of insurance products can help to mitigate the impact of a hard market in any one specific area . For example , if one type of insurance is experiencing higher premiums due to increased claims , the agency may be able to offset this impact by selling more policies in a different area where premiums are stable or even decreasing .
4 . Develop a strong digital presence : In today ’ s world , having a strong presence online is essential for businesses of all types , including insurance agencies . By improving your website , maintaining an active social media presence , and using digital marketing techniques , agencies can reach new customers and expand their reach .
5 . Look for opportunities to save money : In a hard market , it may be necessary to look for ways to reduce expenses in order to maintain profitability . This could include negotiating lower rates with suppliers , finding more cost-effective ways to advertise , or streamlining operations to reduce inefficiencies . Investments in your agency ’ s efficiency are key , and those agencies that have made these investments will be well-positioned to perform well in a hard market situation .
6 . Consider joining a network : By joining a network an agency can expand the range of products and services offered and increase the number of customers they can serve .
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This is a time when your advice and guidance are key to building a strong relationship with your customers .”
By implementing these strategies , independent insurance agencies can minimize the potential negative impacts of a hard market and continue to operate successfully . Agencies that anticipate and prepare for the changing insurance environment are able to be better equipped to meet the needs of their customers .
By simply having the infrastructure , procedures , and foresight to be proactive they will be able to outperform agencies that continue to operate the way they always have . The ability to be nimble and adjust as the market conditions change will be appreciated by their customers and will serve agencies well in a hard market . •
Carey Wallace is the founder of AgencyFocus , an independent insurance agency consulting organization . She has worked in the industry for over 14 years , and with entreprenurial small businesses for her enitre career . She provides agencies with perpetuation , valuation , CFO services , and more . Find more info at agency-focus . com .
JANUARY / FEBRUARY 2023
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