Agency Revenue Tools

It is time to ask yourself and your agency leadership team some hard questions, and it is important to embrace new ideas that have merit and potential. Clearly the sales model of the last ten years is not “getting it done” and we can explain why in a few short statements.

When Commercial Lines renewals are coming in at 20% or more below the previous years’ premiums (for several years in a row), there is a revenue issue. While putting more energy into new account development that will offset this income loss can help, the commercial lines marketplace is not fertile ground for agencies seeking true organic revenue growth.

The Commercial Lines market in the US, according to 2006 industry data, is already “sales-saturated” by the independent agent channel. Independent agents currently control 80% of this business. When you go out to pursue new commercial lines accounts, you’re competing against incumbents with the same weapons you possess.

Hard question-what net growth did your agency experience in commercial lines in 2008? In 2007? In 2006?

Hard question-do you have any reason to believe that 2009 will be different?

Hard question-where can your agency deploy its sales energy, vision, and talent to make up for the commercial lines market challenges in 2009?

One opportunity is right there waiting for you.

Every commercial and benefits account that your agency currently writes is full of employees who are all buying personal lines from someone…it should be your agency. A 500 employee account has personal lines commissions of $100,000+ coming out of the employees personal insurance policies. Currently these are commission dollars being “left on the table.”

The commercial market in the US, as of 2006, was $260 billion in premium, and independent agents wrote 80% of that business. The personal lines marketplace, as of 2006, was $226 billion in premium, and independent agents wrote 34% of that business. Oddly, independent agencies are very competitive when presented with a personal lines prospect…they simply to date have chosen not to aggressively pursue this line of business.

Hard question-are there any valid, business-based reasons for not pursuing the personal lines marketplace?

Most agencies that do not pursue personal lines simply have no passion for that market segment. They came up through the business chasing commercial business, and personal lines has not been “on their radar screen.”

At this time, there is simply too much business opportunity available in personal lines to continue to ignore it. Also, now there are sales and marketing strategies that respond to the concern regarding the cost of business acquisition.

The workplace and affinity approach in 2008/2009 is sophisticated and efficient. Agencies with the vision to pursue this opportunity can keep their independent agent business model while targeting employees and affinity groups. Multi-company, full commission, agency-makes-the rules for P&C business. This is business the way independent agents do business, and the numbers are there to support the endeavor.

Look at your commercial book, your benefits book, and at the employers in your market area that perhaps you do not currently insure(hospitals, schools, municipalities)…determine how many employees exist within that employer base, and multiply that number by your agency’s average personal lines account commission.

What is your agency’s annual commission opportunity?

Call Agency Revenue Tools today. Our system, training, educational resources, and support will enable your agency to capture this business.

What are you waiting for?