The independent agency business is changing at breakneck speed. Agents are experiencing many inter-related factors that are affecting their businesses. They include:

Significantly increased competition;

Rapidly aging agency force;

Clients/prospects demanding convenient and immediate service;

A shortage of new, young employees;

Constantly evolving technology and associated costs.

If independent agents are going to stay competitive and grow, they must evolve. They need to find new ways to compete in the marketplace.

Consumers attention needs to be drawn away from price and focused on protection and the value of professional advice and service. Agency owners and managers must regularly review how they operate, focusing their attention on ways to be more competitive. Agencies need to be more creative in accommodating customers demands for convenient and immediate service.

It may not mean offering customers the ability to purchase coverage at four oclock in the morning, but it is going to mean it wont be business as usual. Non-traditional office hours, 24/7 computer access for consumers to review product information, and convenient delivery of coverage and service will be required.

With an aging agency force, including agency owners, and a shortage of new, young employees, independent agency owners will have to focus on developing and retaining their existing employees. At the same time, they will need to locate, hire and train new staff. The changing demographics of the work force means agents will need to look for creative ways to take advantage of the large pool of retirement age workers who offer a significant knowledge base and want to continue working part time. Utilizing retired workers on a part-time basis as mentors and coaches for new, young developing employees is also a possible solution.

When it comes to locating potential new hires, agents should focus attention on high school graduates not interested in pursuing a four-year college degree but who would pursue a job that could develop into a career. Two-year community colleges are also a great resource for finding viable candidates. Agency owners need to develop relationships with high school guidance counselors and community college placement staff so they can gain access to good potential job candidates.

Agencies must maximize the use of technology in order to successfully compete in the marketplace and earn the revenue necessary to attract, compensate, and retain new young talent. It is imperative that agencies examine all their procedures with a focus on offering the most effective and expedient customer service while maintaining the professional integrity of how they operate their agency based on errors and omissions Best Practices. The effective use of automation and technology is the key to meeting the challenges of profitably running an independent agency.

From a marketing perspective, agencies must maximize the various insurance products they offer existing clients. A carefully planned and executed marketing plan for developing new clients as well as new lines of business for existing clients is essential. The marketing plan should be reviewed regularly to monitor success and adjusted where and when appropriate. When agencies are reviewing and revising their agency procedures, they need to ensure the job duties of all agency personnel are well-thought out and followed. Its important that all procedures take into consideration the sales goals of each and every member of the staff.

Its quite apparent that successfully operating an independent agency today and in the future is a major challenge. If agency owners attempt to achieve all the changes necessary at one time it may seem, and probably will be, insurmountable. Agencies need to plan the necessary changes over time, prioritizing and attacking the most important and/or demanding issues first. Independent agents should utilize every possible resource available to them for:

Locating, hiring and training new and existing staff;

Researching, purchasing and utilizing automation and technology;

Reviewing and modifying agency workflow procedures and E&O loss control;

Employing sound agency management and planning practices;

Enhancing employee benefits and paying close attention to human resource issues.

As anyone can see, the effective operation of an independent agency in todays world and the future is not business as usual. Success is the reward for those agencies that make the changes necessary to properly position themselves in this evolving marketplace.

As IIABNY member advocate and assistant vice president of member programs, Jamie Deapo acts as communicator between agent, company, and trade association. His 15 years of experience as an independent agent coupled with a background in underwriting and marketing for insurance companies has given him a well-rounded perspective. A daily dose of conversation with independent agents from every corner of New York helps him understand the issues and concerns of the day. Deapo is also the outspoken voice on IIABNYs Word on the Street Podcast. Listen to these candid conversations at www.iiabny.org, by clicking on the News link on the left-hand side of the homepage, then Newsletters and Publications and Word on the Street Podcast.