Proven Insurance Agency Growth Strategies

Posted on September 23, 2021October 25, 2021 by Eddie Price

Considering that laws exist to mandate insurance coverage for homes, automobiles, and other possessions, you wouldn’t think agency owners have a hard time growing their business. However, this particular industry is highly competitive.

That’s why insurance agencies need to adopt proven strategies to help them stay ahead of the curve. If you own or operate an insurance agency, the following options work amazingly well to build a stronger client base, which equates to generating more revenue.

It’s All About Technology

Perhaps the best way to grow your agency is to update your current software. Today, you can find insurance agency management systems that help agencies run more efficiently and effectively.

As a prime example, rather than manually search for or fidget with an old program to find better and more affordable coverage for an existing policyholder, current technology performs this and many additional tasks automatically.

The right system will keep everyone in your agency organized, send alerts so that no one misses a key appointment, handle billing, and even assist with marketing efforts. Overall, updating your agency’s management system will create an opportunity to better connect with prospects and current clients.

Adopt the Right Mindset

Unfortunately, some insurance agency owners feel intimated by growth. While they want to see their agency reach a new level of success, if that means stepping outside of their comfort zone, they’re hesitant to take risks – even calculated ones. So, another proven way to grow your insurance agency is by adopting a new mindset.

Remember, there’s always someone who can answer your questions and provide guidance as you move through uncharted territory. This is also another way that updated technology can help. With almost everything you need at the push of a button, there’s nothing to fear. Instead, embrace change so that you can see your vision come to fruition.

Set a Definitive Goal

Having an idea and setting a goal are two different things. To grow your insurance agency, you need to take your ideas, turn them into a definitive goal, and tackle them head-on. Your goal can cover many different aspects of insurance, and you may even establish more than one goal.

For instance, you probably want to focus on increasing the number of policyholders that your insurance agency handles. For that, you need a definitive marketing goal, something designed specifically for the industry. Another goal might entail improving communications between your agents and clients. In that case, you can again utilize a more advanced software program and provide in-depth training.

Identify Your Client’s Pain Points

If you aren’t aware, pain points are things that cause your clients to stress. Usually, they have to do with inadequate coverage, expensive premiums, a labor-intensive claims process, and so on. Although every client has unique pain points, by doing some analysis, you’ll quickly identify several things they all experience.

By understanding the primary pain points allows you to develop a strategy to either eliminate or reduce them. Once again, with the right technology, you can enter valuable data about your clients to better understand the areas of your agency that need improvement.

Refine Your Agency’s Sales Strategies

Especially if you’ve been in the insurance industry for a long time, there’s a good chance you’re still following old guidelines that aren’t effective today. This particular industry is ever-changing. For that reason, you also need to change the way you and your agents sell policies.

For this, you can find a wealth of information online. You can also listen to podcasts hosted by respected industry leaders. Take advantage of every avenue possible so you can refine your current strategies.

Broaden Your Knowledge Base

As stated, the insurance industry constantly evolves. That means there are always new things to learn. The key is to avoid getting too comfortable with what you know so that you can broaden your knowledge base. Ultimately, this will allow you and your agents to make better and long-lasting connections with clients. In turn, you’ll begin to see substantial growth.

Don’t Overlook the Value of Content

One thing that every successful insurance agency needs is a professional website. If your agency doesn’t have one, it’s worth the investment to have one designed that perfectly showcases your business, products, and agents. As part of that, you want content that’s informative, interesting, useful, and enticing.

The goal is to draw prospects in and then offer them information that will encourage them to inquire about your agency or purchase a policy. What it comes down to is that an excellent website is a powerful marketing tool.

Remain Staff-Centric

In simple terms, that entails building a team of goal-oriented agents. Sometimes, agents come onboard with existing experience. However, if you have a novice agent who’s eager to learn, this is where training can help that individual become one of your top sellers. When hiring, look for people with a positive attitude and a lot of drive.

Don’t Shy Away From Outsourcing

Sure, you probably want to handle everything in-house. However, if you need a specific skill or have a particular task performed that’s beyond your or your agents’ capabilities, don’t feel nervous about outsourcing. As an example, you might want to hire a professional trainer rather than allow someone on your team to do the training.

Leverage Your Data to Sell More Insurance Policies

Posted on September 21, 2021October 25, 2021 by Eddie Price

If you asked 100 insurance agency owners or agents what goal they consider a priority, probably all of them would say to sell more policies. After all, that’s what the insurance industry is all about. Yes, they want to build lasting relationships with the clients they serve, but at the same time, they aim to increase their annual sales.

To accomplish that, insurance agencies try all kinds of solutions. While some of them work, others fail miserably. Rather than waste valuable time chasing something that isn’t going to help your agency achieve this goal, you’re better off choosing an option that’s proven to work. That entails leveraging your data.

What Does Leveraging Data Mean?

For the insurance industry, collected data needs to go well beyond a client’s name, address, and phone number. If you want to achieve greater success, you need information on much more. For instance, you want data on past and present policies, premiums, claims, and pain points, which they stress about.

Not only that but having some degree of personal data also helps build strong connections. Something as simple as knowing that a client has a child starting college, they recently had surgery, or they just saw their son or daughter get married will go a long way in getting more business.

From a client’s perspective, when an insurance agent asks how their child is doing while away at college or how they’re feeling after surgery, they feel as though the agent takes a personal interest in them and their family. To succeed, you do need to take a personal interest but also use that information to develop a personal yet business relationship.

What’s the Best Way to Leverage Data?

Years ago, insurance agents had to put things to memory or manually write information down in a tickler file. Today, the most successful agencies rely on a robust insurance agency management system. This alone can significantly increase sales and help you set your business apart from the competition.

While having some personal information is helpful, the ultimate goal is to demonstrate to your clients that you and your team fully understand their specific needs. The only viable way to do that is to use a system that stores as much information as you can to enter. The best system even stores data in the cloud, so you never have to worry about information disappearing.

Not only will the right insurance agency management system store client data, but it will also perform multiple tasks and streamline processes. As a result, you’ll find that your agency becomes more organized and efficient. In response, you can anticipate your team feeling more confident and motivated to close deals.

Cross-referencing information is just one feature. Say you sold a policy to John Smith. Then, another agent in your office sold a policy to Debbie Jones, who happens to live next door to John. The other agent can enter information that reveals their connection. The next time you speak with your client, you can mention that Debbie is also a valued customer. Immediately, cross-referencing became a powerful tool that allowed you to build a connection.

Don’t Stifle Your Insurance Agency’s Growth

A lack of information is one of the top reasons that insurance agencies don’t make it or fail to grow. Beyond daily tasks and relationship-building opportunities, the best software program identifies insurance trends, gives a heads-up about new insurance-related laws, and indicates pricing changes.

So, if you have a client who needs to keep premiums as low as possible and you get an alert on pricing that would save them money, you can contact that client to suggest a change. That’s what leveraging data is all about. It consists of taking advantage of the information you have, not just to sell more policies but also to provide clients with better service.

In a scenario such as this, here’s what can happen. You let your client know that you can reduce their monthly premium. That person then tells family members and friends. From there, one of those individuals asks to know the name of the insurance agency and agent. Before long, you get a phone call from a referral who wants to see what you can do for them in the way of coverage.

Staying Ahead of the Curve

Without question, the insurance industry is fiercely competitive. As a result, multiple insurance agencies vie for the same customer. The one that makes the best impression will probably get the business. It’s your mission to make an impression that attracts prospects and then converts them into customers.

The great thing about using an advanced insurance agency management system is that it gives you insights that you wouldn’t otherwise have. Another thing is that when you opt for the right software, you’ll find that it’s easy to use even with the complicated tasks it performs. With a helpful dashboard, you and your agents can get up to speed in no time.

There’s also the marketing aspect of leveraging data. A powerful system can generate reports based on set criteria. So, if you want to determine the type of policies your agency sells the most, you can generate a report in no time. Based on that data, you can modify your marketing strategies if needed.

Summing It Up

To experience insurance agency growth, you need to leverage your data. The return on this investment will astound you. Armed with an effective tool, you and your insurance agents will quickly see an increase in policy sales.

Insurance Agent Compensation Models – Which Is Right for Your Agency?

Posted on September 16, 2021October 25, 2021 by Eddie Price

Most people know that insurance agents work off commission. That means they get a specific percentage of the sales they make, which comes from the premiums the clients pay. However, there are different insurance agent compensation models, some good and others not so good.

If you own an insurance agency, selecting the right model isn’t a quick or straightforward decision. For this, you need to consider all the information provided. Then you can set up the appropriate compensation model for your agency.

Types of Commission Models

For the insurance industry, agents get paid commission or a percentage of the premiums for the policies they sell. There are three primary compensation models that agencies follow. These include Residual, Upfront, and Renewal:

Residual

Residual commission payments connect directly to premium payments. That means, at the time an agent closes a deal, they get paid a percentage. However, they receive a further commission whenever the client renews the policy, albeit at a lower percentage rate. Although not always, residual commission payments are the most common for automobile and health insurance policies.

Upfront

Upfront insurance commission payments are quite different. Typically, they’re associated with life insurance, including whole life and annuities. On average, an agent earns 10 percent of the premium purchase, although that can go much higher.

In this case, an insurance agency owner determines the amount of the payment the agency keeps versus what’s passed on to the agent. For larger agencies, the payments often get split between several management tiers. The greatest benefit of upfront commission is that it encourages agents to work even harder to sell policies.

Renewals

Just as the name applies, the renewal compensation model means that agents receive a percentage whenever a client renews a policy. However, this is usually only 2 to 5 percent of the premium. While it’s not a significant amount of money, an agent with many renewals or renewals of high-priced policies can earn quite a bit more.

Defining Factors

However, the way that insurance agents get paid also depends on several factors, including the type of insurance sold.

Life Insurance

Long-term insurance policies, including life, typically last a minimum of 10 years. Therefore, agents earn a healthy upfront commission. Usually, new policies equate to 40 percent on the first year’s premium. Then for renewals, the percentage drops significantly.

It’s important to note that state laws regulate insurance agencies. For that reason, rules vary from one state to another. Also, many states limit the number of policy renewals an agent can earn commission on. In some instances, commissions stop once a policy hits its 10-year mark from the date of sale.

For life products, different commission structures exist.

Heaped – This is the common choice for agencies that sell individual life insurance. As stated, an agent makes the highest commission from selling the initial policy and less for renewals.
Level – With this, an agent earns the same commission for both first-year and renewal periods. Typically, this is for group life insurance policies.
Levelized – An agent makes a higher commission on the first-year premiums and less on renewals for group life products. However, the difference with this structure compared to the heaped structure is that the percent for renewals is higher.

Health Insurance

The compensation model for health insurance is similar to long-term (life) policies. So, an agent will make the highest commission after selling a policy and then a lower commission upon each renewal. The primary difference is that most health insurance policies expire in about three years.

Property & Casualty Insurance

For casualty, automobile, home, and other property insurance, policies don’t last nearly as long as the other two mentioned. For that reason, the commission model consists of a much lower percentage. Generally, this ranges between 5 and 20 percent, again with renewals even less.

Additional Variables

Along with the type of insurance are more variables that determine how much commission an insurance agent makes.

Client Support – This includes the support an agent provides to a client when selling the first policy and after. Excellent support entails building relationships with clients, keeping in touch, providing them with options for new coverage or saving money, and so on.

Lead Generation – If an agent generates all their leads, they’ll often earn a relatively high commission. However, if an agency implements a software program that helps generate leads, the commission might drop somewhat.
Marketing Strategies – In some instances, an agency will invest in a tool that improves overall marketing efforts. That could be an innovative software program or a professionally designed insurance agency website. Just as with lead generation, this can cause an agent’s commission to drop. However, it also opens the door for building a stronger client base, which equates to more business and, therefore, more commission.
Partnerships – If two agents tackle one client as a team, they will split the commission. Although this isn’t overly common, it does happen, especially when targeting a large client.

Choosing the Best Model for Your Agency

Now, you need to decide on the right compensation model for your insurance agency. You want to attract talent by offering agents an excellent way to earn a top commission. You also want to keep great agents by doing the same thing. So, the model you select can play a big role in the success of your business.

Take time to understand and analyze the different compensation models, types of insurance, and the various factors mentioned. That will help you choose the best option for your agency and agents.

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