The other night Michael Moore sang several verses of the 1964 Bob Dylan song “The Times They Are a- Changin” on The Jay Leno show. Ever since then those lyrics have been playing over and over in my head. As I sat down to write this column it hit me how appropriate the song title and lyrics are to what is going on in our business. The times are changing drastically for our business and any agency that doesn’t see the changes coming and prepare for them probably won’t be here in 5-10 years. Independent agents have always been resourceful in finding ways to remain a force in the insurance marketplace; however the magnitude of changes that I believe are coming may overwhelm even some of the most resourceful agencies unless they start planning for them now.
I believe the significant changes will come in 4 areas:

1. Turnover of people in both the ownership and staffing of an agency.
2. Dramatic change in the speed and availability of service
3. Change in the overall structure and management of the agency
4. Change in the way you communicate with clients and prospects

It’s no secret that independent agency owners and key staff are aging. I have seen estimates that the average age of agency owners is in the mid to late 50s. It’s safe to say that the same holds true for the average age of the key agency staff. Unfortunately, many agencies did not react to this fact several years ago and only know are acknowledging it and making plans to deal with it.
The issue of staff turnover is further multiplied by a failure to attract new young talent to our industry coupled with a generational change in work ethic.
To deal with this problem agencies have to develop a strategy for attracting young people into their operation. They have to change the structure and management of their agency to accommodate this new workforce. The have to make plans for providing these new employees with the technical knowledge necessary to effectively handle the duties they are assigned.
To deal with this changing workforce, agencies will need to understand Gen X & Y workers who see the world differently than they people they are replacing. These new workers like to learn and have hands-on involvement. They want to give their input and have it valued. They don’t follow current business norms and would never be called 9-5 employees. They are very adept at using technology as they grew up with it. They also need supervision, training and guidance to keep them on track; however you don’t want to restrict their questioning nature and creativity.
Clients and prospects demand for service will change. They are going to want things faster and available at their convenience on a 24/7 basis. You will have to utilize technology to keep up with and meet their demands. The use of VOIP (voice over internet protocol), Skype, instant messaging, social media, on-line quoting and the outsourcing of 24/7 service will be necessary.
They want knowledge so they can become a better, more informed consumer. If you don’t give it to them they may get it from some other source who may give them inaccurate information or worse yet take them away from you as a client. Your agency website, blog and/or newsletters will have to give them good information meant to educate them as a consumer and keep them aware of issues and trends that may affect them and their family. Actually, educating clients and prospects can be a positive because it gets them to appreciate the services an independent agent provides for their clients.
Independent agencies in the future will be structured and managed differently. I believe sales and service will have to be completely separated and each area will have to have regular training and supervision. Staff training will become an integral part of the agency operations. The staff will need regular training and follow-up in both their job specific functions (sales or service) as well as knowledge based training in insurance. Even though the new workforce will be familiar with technology there will still be a fair amount of technology training necessary especially as it relates specifically to insurance. A significant amount of knowledge and expertise will be leaving agencies over the next 5-10 years and that knowledge and expertise is a key reason why people do business with an independent agent. The new workface will need to be as proficient as possible as soon as possible so agencies don’t lose their competitive advantage. The days of OJT (on the job training) are over at independent agencies. The split between sales and service will be necessary due to ever increasing competition. Your sales staff will have to be well trained, aggressive and constantly improving and honing their skills. Carriers are looking for increased volume and many are going direct to get that volume as well as investigating whether you can be cut out of the equation. Agencies can no longer rely on mergers and acquisitions for growth and must develop a sales force that provides regular organic growth. Although they heaviest competition currently is in personal lines we are already seeing increased competition in the main street BOP eligible business.
The strong agencies of the future will be those who have a serious focus and commitment to sales and growth In addition to training and supervision there are 2 additional areas I believe will have to change in the agency of the future. Agencies will have to offer excellent and flexible benefits packages. With all the effort it will take for an agency to find and hire good new talent the last thing you would want is to lose that talent because they didn’t feel they were being offered a good employment package. Locating, hiring and training a new employee carries a substantial price tag and no agency can afford to lose that investment for reasons within their control.
In addition to an excellent and flexible benefits package many agencies may have to change the ownership structure of their agency. A more cooperative style of ownership; where everyone, or at the minimum key staff, have some type of ownership in the agency will very likely be necessary. Gen X & Y employees have a tendency to want to have “skin in the game” with some type of ownership. Remember these 2 generations of employees aren’t looking for, nor do they expect, lifetime employment. Matter of fact they anticipate holding several different jobs in their lifetime possibly including self-employment. There may be interest in looking into bringing certain employees on as independent contractors, however at the current time with all we know this might not be a feasible solution. Agencies may also find they can reduce the size of their physical office space. Today’s technology allows for many of the current employees of an agency to work from home or off-site. This creates a flexible work environment for the employee and reduces transportation costs. It also reduces fossil fuel consumption and emissions which is a major objective of the green or environmental movement. Gen X & Y employees would look positively on any effort meant to improve the environment especially one initiated by their agency.
The last item is the way agencies will communicate with their clients and prospects in the future. I recently saw where an agent indicated he had approximately 40% of his client’s e-mails and was asking whether that was low. I thought that was actually probably quite high. Having the e-mails for as many of your clients and prospects as possible is just a small part of communicating with them in the future. As I mentioned in a previous paragraph VOIP, Skype and instant messaging may become the norm for client communication. Even now it is possible to use webinar software like Go to Meeting to educate a number of clients, in seminar style, to potential issues. This software can also be used one on one with a client to do a coverage review or to go over a renewal proposal. Imagine the time and cost savings associated with this as well as the comfort level for your client. Believe me I am not espousing the elimination of face to face visits with clients; however this software can be coordinated with actual on-site visits.
Clients are also going to want to communicate and get service whenever it is convenient for them. The days of 9-5 office hours are gone. Clients can shop on-line 24/7 and can have things delivered to their door within a day. Your competitors in personal insurance are already offering prospects and clients 24/7 quoting and service so you have no real choice but to offer it as well. Unless you choose to have several shifts at your office or stagger work hours you will most likely have to outsource this service. There are several vendors who do an excellent job at this and whose pricing is cost effective.
If you are having written communication with clients and prospects via a blog or newsletter you need to make sure the communications go out on a regular basis and are relevant and useful to your client. Make sure your blog subjects are specific and targeted to an issue or need they may have. Getting clients and prospects to visit your blog will take a significant effort and you want to make sure the experience is positive so they will return. You definitely want to update the blog on a regular basis. If you are going to use newsletters you might want to shy away from canned newsletters that many times don’t have relevant or useful information. A well thought out and written agency developed newsletter can be a useful forum for imparting information as well as an excellent sales tool. If you are going to spend the time and money to send out a newsletter it ought to be one that has value and drives additional business to your agency. A good newsletter is also a valuable tool in creating a relationship with prospects. If you include them in your mailing you may find that the newsletter( s) they receive from you is/are significantly more contact than they get from their current agent. It may lead them to question the commitment their current agent has in keeping them informed and serviced. I believe these 4 areas of change should be on every agency owner or manager’s To Do list. You really need to be tackling these issues now and making plans to deal with them. Even if you don’t agree with all the items and issues I have outlined I would encourage you to work on and pursue those you do. I would also encourage you to take time and do your own assessment of where the business is going and what you need to do to accommodate that change. Way too often we get wrapped up in the day to day work and don’t take time to stop and evaluate where we’ve been, where were at and where we want to be. Our business is changing rapidly and as the children’s