ONWARD & UPWARD: A MESSAGE FROM JASON ERNEST I have the honor of speaking at the Pennsylvania Association of Mutual Insurance Companies annual spring conference, where I’ve been asked to present the state of the union for independent insurance agents to over 100 company executives. I’d like to give you a preview of my presentation, “What It Takes to Win as an Independent Insurance Agent.” Because this conference will be held at Penn State University, my alma mater, I figure I’ll harken back to my some of my math classes there. A winning agency can be defined by the following equation: P = (AT - ST) * 100 In this equation, P is production – the singular way to measure success in an independent agency. Production is determined by first taking administrative time (AT) and subtracting sales time (ST). By this I mean, how much time an agency spends on new businessgenerating activities, versus time on any non-sales related activities (HR administration, compliance, as well as processing a renewal book and servicing existing clients). Then multiply the difference by the constant 100, which represents new business effort.
Like golf, the goal of the equation is a low score. Realistically, the best AT - ST score an agency can accomplish is 2 (51 percent AT versus 49 percent ST). An agency devoting more than 50 percent of its time to new sales-related activity would collapse due to the inability to address necessary administration. However, I’m afraid most agencies sit at 80 percent administrative time and 20 percent sales time. And moving forward, that’s going to be a tough ratio to support. Of the countless agencies I have observed, the winning ones devote above 30 percent of their time to generating new business. They put full effort into using that time wisely: using technology smartly, developing a niche market, developing a strong marketing brand. They differentiate themselves against the competition. Ultimately, they also have the talented, competent employees in place to write the business. A recent independent agent survey (“Agent For The Future”) conducted by Safeco Insurance revealed that agents spend approximately 70 percent of their time on non-sales related activity. Conversely, that
leaves 30 percent for quoting or prospecting new business. Surveyed agents shared that they want to be at 42 percent sales time (26 percent quoting and 16 percent prospecting) in the future. I believe these agent responses are spot on. To be a winning agency now, and in the future, the agency must shift its focus. Applying my equation above – a winning agency should be able to show 60 percent administrative time, versus 40 percent sales time, at 100 percent effort. Do that, and you’re going to win this game called insurance. To accomplish this, an agency must take immediate measures to curtail its administrative time. I’m not suggesting you cut administrative tasks; instead do them smartly and efficiently. 1. Invest in technology. Enjoy time savings through digital signatures, a paperless agency, and an effective website. 2. Seek experts for administrative tasks. For example, why spend several days laboring over a HR or compliance issues, when you can invest in an expert that could provide an immediate solution?
Published on Mar 1, 2018
Published on Mar 1, 2018
Peer into the future – of your agency and the industry at large – with the March Primary Agent magazine. This issue shares insights on perpe...