Blog

The Online Playing Field - Level or Slanted?!

I'd like to share with everyone a recent discussion we had at the office …

The premise:  The increase in availability and the use of the internet by today’s consumers (and insurance purchasers) favors the direct writers and companies that focus much more heavily on direct marketing and the internet as a lead source.  Does this create a disadvantage for independent insurance agencies?

What do I think?  Not a chance.  I prefer to think that the independent agency system exists because a significant portion of the general public has an inherent need to establish a personal, trusting relationship with whoever handles his/her financial and insurance well being.  It is this need, along with the capabilities and professional expertise of insurance agents, that will ensure that the independent agency system will always exist.

What is the difference now though?  Are direct writers grabbing a larger share of the population as compared to independent agents?  Now, my thoughts are not based on specific reports, as that would vary widely from state to state, but rather an exploration of the reasons people go to one source or another for insurance and how technology has affected the way we communicate.

I think that the increased use of the internet and all the available methods of communication, research, and purchasing do indeed provide many more options for the consumer.  But, I also feel that these capabilities have a tendency to make the consumer better informed, and as such, a better client for agents to serve.

There may have been a slight advantage to companies and direct writers when they started to exploit the online world, as they had more resources — and more strategic planning in place — than the local insurance agency. But today there is so much information available at little or no cost that the local agencies should, if they are thinking strategically, be taking advantage of online tools to connect and keep up with their clients [if you are an agency and are not doing this, then we need to talk!!!].
 
What do you think?  Is the playing field more level now for independent agents? 

Next we will post an opposing viewpoint. - JHH
 

by Jason  | 

Successful Agencies Measure Things

Now more than ever, you should be looking for ways to improve your agency’s performance.  A subtle, but powerful, first step is to begin to really get your hands around key metrics of your current operation.  Remember, having detailed knowledge of something is evidence that you care about it.

Whether it’s a valuation, merger or acquisition, or perpetuation planning, almost every one of our assignments begins with the gathering of data.  In this process, I’ve noticed some recurring themes:

    1.      Successful agencies have owners/executives/managers who set goals and measure things.

    2.      Almost every time we see neat financial statements and are able to get questions answered quickly, we see good performance.

    3.      Almost every time we see cluttered financial statements and are not able to get questions answered quickly, we see sub-par performance.

    4.      Successful agencies that measure things don’t let their management system dictate the data they can or can’t get their hands on.  Instead, they figure out what they want and then see if their system can give it to them.  If their system can’t, they figure out how to get it themselves.

By the way, we sort of don’t care what you’re measuring and I say “sort of” because we definitely have an opinion on the operating dials you should keep your eye on (for example, profit from your core operation, meaning before contingent commissions and other miscellaneous non-operating income).  As long as you’re getting good data, we’re confident you’ll make good decisions and, with that, begin to create the agency you envision. - EWS

by Everett  |