What's on the Horizon? As the World Faces Forces of Change from a Global Pandemic, What is in Store for Insurance Agencies and Our Industry? Featuring Chris Boggs, Michael Burt, Frank Cox, Ryan Hanley, Carey Wallace and Bill Wilson
Let's pretend we did a survey in December of 2019 and asked insurance agencies the following question: "Will you implement any work-from-home policies at your agency in the next six months?" My guess is that 90% of Insurors members would have simply responded, "No," and maybe 5% would have said, "Maybe." if asked the question again in March, I would imagine you could flip the numbers around completely. Change has been forced upon the world. Whether we like it or not, things are going to be different moving forward – and the only question is going to be, "How different?" To get some idea of "how different," we talked to experts inside and outside the industry on sales, coverages, agency operations and more to get their thoughts on what we may see moving forward – pandemic-related or not.
Agency Operations Changes Bill Wilson, CPCU, ARM, AIM, AAM; Founder, InsuranceCommentary.com: The historian Hegel once said that, “History teaches man that man learns nothing from history.” We tend to have short memories. Unless potentially serious pandemics become a relatively common event, frankly, I don’t think you’ll see a lot of structural changes in how agencies operate. If current conditions pass, the masks will come off and handshakes and hugs will once again be in vogue. We are social animals and I think that desire will marginalize the perceived risks. Given time, things should normalize, but I hope that agencies will recognize the importance and value of a comprehensive disaster plan that incorporates loss prevention and reduction measures. 4
Carey Wallace, CEO, IntellAgents and a Keynote Speaker at Insurors Agency Growth Conference: Independent agencies are among the most profitable and predictable businesses causing them to be considered recession proof by almost all measurements. Independent agencies have remained strong over the past 15 years which included several epidemics including SARS, Bird Flu, H1N1, MERS and EBOLA as well as the recession in 2008. In fact, during this time period the number of independent agencies remained constant at 36,500 in spite of an increase in mergers and acquisitions. In 2019, the average agency experienced retention rates of over 90% which created both a stable and predictable cashflow stream. In addition, over 75% of agencies reported that they are growing year over year both in personal lines and commercial lines business. A crisis like COVID-19 shines a bright light on the strengths and weaknesses of all organizations. For those organizations that are healthy well-run businesses, they will continue to flourish as they are designed to measure key performance indicators and adjust as changes occurs. For a lifestyle business, the impact may be significant as that type of organization is not focused on monitoring the data needed to drive business decisions. The reality is that many agencies that were able to operate successfully as lifestyle businesses will struggle to weather this kind of storm. Now more than ever before, agency owners should be utilizing data to create a plan for their agencies.
Coverage and Underwriting Changes Chris Boggs, CPCU, ARM, ALCM, LPCS, AAI, APA, CWCA, The Tennessee Insuror
