I was honored to moderate a panel of agency owners last week at the Valen Summit. The agency owners/CEOs on the panel, Mike Stromsoe of Stromsoe Insurance and Rob Cohen of IMA Financial, are both highly successful, outspoken, and dynamic entrepreneurs who were happy to share their expertise and opinions with the industry leaders gathered at the Summit.
The conversation provided tremendous insight that is too lengthy to capture in detail in a blog post, but I’m excited to share some highlights.
Keys to Agency Growth
Rob mentioned that there were four things that an agency needs to do well to survive and grow:
- Build an organic sales engine with modern, omni-channel marketing and closing capabilities
- Develop a client service model that resonates across your customer base, and meets changing consumer expectations set by Amazon, Uber, etc.
- Strong corporate development (both from an M&A perspective and a product development perspective)
- Get really good at data intelligence—capturing the right data, and understanding it are critical to growth
What Agencies Need from Carriers for Joint Success
Both leaders enthusiastically responded to this question. Agencies need carriers to respond and change quickly – and both agreed that starts with the leadership of the carrier organization. The top five reasons they place business with a carrier (in order) are:
- Ease of doing business was still the number one reason agents place business with a carrier—music to our ears, and an echo of recent findings from Novarica and our own over the years. This not only referred to robust, easy-to-use systems of engagement, but also “ease of problem solving” as Mike referred to it
- Relationships with underwriters
- While they both respected straight through underwriting, both pointed out that there will always be exceptions, and carriers need to get better at handling those exceptions
- Pricing transparency – both wanted insight into how a price is derived, but the previous three items were more important in terms of why they place business with a carrier
- A fast decision
One more thing that I need to mention… Agencyport’s Agent Insight has been showing that CSRs have been saying this for years, but if hearing it from two agency owners sounds any more powerful than hearing it from a CSR—Agents hate carrier-specific applications. To learn more about what agents hate, straight from the mouths of agents check out our webcast, The Top 10 Things that Drive Agents Nuts Working with Carriers.
Are Agents Going Away?
Bottom Line: absolutely not—for the good ones— but, those that don’t evolve to meet changing customer demands could become extinct. Mike drew a great analogy with a real estate broker. If your broker walks you into a house (that you’ve probably already seen on Zillow) and says, “this is the kitchen,” she’s not adding any value; rather, she should be talking to you about “here are the benefits of the features of this kitchen” in order to help you decide which house to buy. Consumers (both individuals and those purchasing insurance for their businesses) will still need this for anything other than the most basic insurance needs.
Agency Use of Predictive Analytics and Predictive Modeling
Being a conference about Predictive Analytics, it made sense to ask the agents if they had any plans to leverage these increasingly important capabilities. I was really surprised by the answer. Not only did they have plans, but both agencies had developed models that had already become critical business tools. Rob said that predictive analytics have been in use in his shop for years to assess factors before they even submit the risk to carriers for quoting. IMA Financial has developed its own predictive models to determine which risks need further attention; which are candidates for quick, straight through submissions; and which carriers are likely to be a better fit for a risk, maximizing the agent’s efficiency and ability to serve the customer faster.
A special thanks to our partner, Valen Analytics, for hosting a great Summit, and to Mike and Rob for joining me as representatives of the independent agent during a time of unprecedented change for both them and their carrier partners.