How to Grow an Independent Insurance Agency in 2021 & Beyond

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How to Grow an Independent Insurance Agency

You’ve built a successful agency with great staff and clients—now you’re ready to take it to the next level. The problem is, many independent insurance agency owners often find themselves hitting a growth ceiling.

  • You know you need to keep selling, but you’re constantly getting pulled into the day-to-day work that comes with running a business.
  • You know you will have staff retiring in the next couple years, but you’re not sure how to handle it.
  • You know new insurtechs and data analytics keep evolving, but you don’t know where to start with incorporating it into your agency.

While it might seem even more challenging now during the COVID-19 pandemic—it’s more important than ever to focus on finding and executing proactive growth strategies for your agency in 2021 and beyond.

How can you do it? In this article, we’ll be breaking down the processes you can follow and strategies you can implement to grow your independent agency for years to come.

Growing an independent agency successfullyInsurance Agency Growth Best Practices

As a P&C insurance agency principal, you’re already juggling multiple hats across operations, clients and carrier relationships, sales, HR, and more. Add on the fact that the insurance industry continues to evolve with new technologies and processes every day, and the stress to keep up becomes very real.

To help you stay ahead of the curve and break through that agency growth ceiling, consider implementing these four strategies.

1. Use data to your advantage

Data intelligence is crucial when it comes to recognizing which types of policies are most profitable, where the greatest opportunities for upselling or cross-selling exist, which carriers are offering the best compensation, and more.

You may already be using data to your advantage in some capacity. If you’re keeping tabs on high renewal increases, or cross-sell opportunities, or simply checking in to see which periods of the year are your highest volume—you’re off to a good start.

If you haven’t gone down the data and analytics path yet, don’t worry. Here’s two reasons why you should consider leveraging data within your agency:

Uncover more opportunities.

Tapping into data and analytics helps with spotting clear opportunities to grow your client list and overall premium. It allows you to dive deep and recommend additional insurance policies or coverages based on what similar clients have also purchased.

For example, if you see many of your clients have both home and auto insurance through a certain provider, you can filter your client list down to look for clients with only home insurance through that provider, then reach out to upsell them on auto insurance as well.

Insurance Agency DataSet better goals and monitor your progress.

Access to easy-to-understand data helps with setting realistic, yet rewarding goals for your agency. For example, you can identify your top-performing carriers and set a goal to increase your sales with that carrier by 10 or 20% next quarter. From there, you can set up a dashboard to keep tabs on your progress throughout the quarter so you know how you’re progressing to your goal.

2. Upsell and expand existing clients

Building on the opportunities data can uncover, selling to existing clients is one of the most profitable ways to expand and grow your P&C insurance agency.

You already have the relationship established, the challenge at this point is to find opportunities to expand it. Here’s how to approach it:

Address client needs.

Oftentimes insurance is required by law for certain purchases. In other words, your clients need the products you’re offering. That said, the reality is that customers are often indifferent when it comes to insurance policies. To them, there’s very little difference between one policy to the next, which opens the door for you as the insurance agent to educate your clients and help them understand what coverage makes the most sense for them and their risk profile.

Look back at past conversations you’ve had with them and line up the new policies you pitch with what you’re confident they can benefit from.

Strengthen client relationships.

One of the best ways to build a positive relationship with your existing clients is to proactively reach out when policies are coming up on renewals, or when better plans or better rates come up. Prove to them that you genuinely do care about what’s best for them, and become their sounding board for insight and advice about new policies or services.

As an example, reach out to all of your commercial customers to try to write their personal policies. Or vice versa – try a campaign to all personal lines customers advertising your ability to help with their business insurance if they own a company.

3. Increase market access

Client acquisition and retention are both significant growth levers for an independent insurance agency, and insurance market access is an integral part of this growth.

If you don’t have access to the right markets, you won’t be able to provide as many products or quotes from different carriers to your clients as your competition, which can lead to clients switching agencies to hunt for a better deal. This is particularly true for independent agencies that have large personal lines businesses and are trying to grow their commercial lines business. Not having enough access to commercial products can be a major hurdle in creating the growth agencies are after.

Greater market access means more quotes, which means more business for your agency.

The most common way to increase market access for independent P&C insurance agencies is to partner with an insurance agency alliance like Renaissance Alliance. Renaissance members have access to over 45 standard carrier partners. Renaissance is the largest agency partner for many carriers which allows for better compensation deals and underwriting flexibility to offer the best and most profitable options to you and your customers.

4. Join an insurance agency alliance to support your growth

Joining an agency alliance (also known as an agency aggregator) is one of the best growth paths for independent agencies to take, if you join the right one. Many only offer increased market access and profit sharing, so you need to look carefully to find one that also focuses on helping your agency to organically grow.

Renaissance Alliance works with independent P&C agency owners to grow your premium, maximize your revenue and increase the value of your agency. This is done by increasing profit sharing and fixed override revenue while simultaneously outsourcing non-revenue generating activities to focus on your core business. The net effect is increased revenue, decreased expenses and higher growth rates.

This helps increase your growth with personalized client services, control overhead costs, better use the data you already have within your business, outsource tasks that don’t lead to revenue, and improve your profit margins.

Here are a few other benefits of joining an agency alliance to grow your agency:
  • Maximize revenue: Increase market access, profit sharing, and commissions to boost revenue within your agency.
  • Increase close ratio: Use data-driven insights and an experienced placement team operated by the alliance to your advantage.
  • Improve client retention rate: Leverage the agency expertise to create custom programs for your clients and automate notifications when policies are approaching renewals.
  • Increase productivity: Redirect your staff to other revenue-generating activities rather than having them invest hours into day-to-day operational tasks.

Ready to accelerate your agency growth?

It’s hard enough for independent insurance agencies to compete with the large brokers and direct-to-consumer providers for clients. It’s going to be all the more difficult if you’re not focused on proactively growing your agency.

Let’s recap the four growth strategies we’ve covered:

  • Use data to your advantage to spot growth opportunities and set realistic growth goals.
  • Upsell to existing clients to expand your relationships and revenue.
  • Increase your access to markets to improve the options you can offer to retain and win more customers.
  • Join an insurance agency alliance to partner with other experts in the industry, connect with likeminded agency owners and free up your team to focus on revenue generating work.

If you’re interested in learning more about how an agency alliance can help you, get in touch with a Renaissance Alliance expert today to talk about how you can grow your independent agency this year and beyond.

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About Renaissance Alliance

Renaissance Alliance works with independent property casualty agency owners to grow your premium, maximize your revenue and increase the value of your agency through increased profit sharing, guaranteed override revenue and offloading non-revenue generating activities. The net effect is higher revenue, decreased expenses, improved operational efficiency, and accelerated agency growth.

 

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