Insurance Business America issue 5.10

Page 58



BANKS AND other institutions that provide financing to the insurance industry play an integral role in enabling agencies to expand their books of business. In the current insurance landscape, standing still is akin to going backwards, and any agency that isn’t continuously looking for ways to grow by making investments in its business could face a battle to survive. The vast majority of insureds value having an agent at the end of a phone, but in reality, that value proposition may not be enough for an agency to maintain its business going forward. Money talks, and a lot of it is being spent right now on trying to encourage clients to transition their business to low-cost alternatives. “Everybody is going after the agency clients: Close to $2 billion a year is being spent by the investment community on trying to work out how to disintermediate agents from their clients,” says Robert J. Pettinicchi, executive vice president of InsurBanc. “Money is being spent on trying to get access to the consumer that the agent controls, so savvy agents need to make investments in their business, technology and people.”

Growth mindset

The means for expansion Making investments in the business is crucial for any insurance agency, but what’s the best way to secure financing? 56

Investing in the future is a core driver of success in today’s market. While implementing strategies that enable organic growth should be a top priority, creating growth through acquisitions should also be a key consideration for ambitious agencies. An acquisition has the potential to add strength to an agency by obtaining multiple growth drivers in one fell swoop, including qualified people, specialty business lines, and access to new markets and geographies. “Some of those new staff members could also be future owners of the business,” Pettinicchi says. “An acquisition helps to grow your business and make it more valuable, but you could also create an embedded population of people who may be able and willing to

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