In case anyone hasn’t noticed lately, we have come to the point in time where things are changing around us daily. Everything in business has to evolve with these changes to keep up and stay competitive. Insurance carriers and independent agencies alike are now trying to figure out what they can change, without changing what needs to be changed.
It’s like the old saying, “can’t see the forest for the trees.” The insurers and the independent agents both have business specific issues, but neither one can see them. The insurance industry is one of tradition, paying your dues and doing things the same way; generation after generation. No matter what the outcome may be.
However, business methods have evolved and the insurance industry has to decide how it will evolve. Many say that young people don’t want to have their own agencies, or they’re not interested in insurance as a career. New research and studies are proving this isn’t true.
Financing and inability to get (Carrier) company contracts are the biggest reasons young agents don’t become independent owners. The smaller, independent agents that are left still have the old way of thinking. They don’t want to manage other agents or give up their producing power to mentor others. This leaves them alone to compete with other larger agencies. In part, this is leading to small independents being forced out.
Both the carriers and the small agencies are at a crucial decision making point. The carriers need to determine how they want to do business. In doing business with larger organizations, carriers may find the larger firms dictating what the terms of service will be. However, the carriers will get high volumes of business.
Carriers have more power over the smaller firms, but can’t usually get the high business volume. The independent agents must decide if they will remain small or expand into a larger organization. They must also rethink their management strategies. Regardless, both sides will have to cultivate environments of partnership, mentoring and good management skills to stay competitive and thrive successfully.