Insurance Agency 2021 Business Planning – Reimagined

As the most disruptive year to businesses in our lifetimes comes to a close, independent insurance agencies are incorporating the lessons learned in 2020 as they plan for the future. The coronavirus will continue to be a factor in 2021, and the ability to adapt to clients’ changing needs should be at the fore of every agency’s decision making and culture.

Whether your agency thrived over the course of 2020, or it was a year you’d like to forget, examining the business impacts of the pandemic on your agency can help determine the direction for 2021 and beyond. A typical cycle of annual business planning involves looking at agency performance, determining where you’d like to go, and charting a course of how to get there. While adjustments along the way are not unusual, this year has caused many agencies to make significant and often abrupt changes to operational and marketing strategies, many of which will endure well into the future.

As you finalize your business plan for 2021, consider these factors of success amongst your independent agency peers:

  • Diversity of lead sources. The old saying “Don’t put all your eggs in one basket” has never been more true. Knowing – not guessing – where your new business comes from is instrumental in determining where to make investments of time and resources. How are you replacing in-person networking events? Are you missing a large number of drop-ins to your brick-and-mortar location? Do you need to beef up your digital strategy and tools?
  • Understand who your profitable clients are, and how they have been impacted. Look at your ideal client(s), and what may have changed over the last year. Do you need to extend into other product areas? Do you need to shift your messaging to better address their needs? Make sure you are set up to retain and deepen the relationships with your most valuable clients.
  • Look at operational efficiencies. As swaths of insurance agency staff successfully shifted to remote operations over the last year, some owners are questioning the need for long-term office space, or as much office space as previously maintained. Remote operations open the door to quality staffing possibilities outside your commuting footprint. With personnel costs accounting for 55-60 percent of any given agency’s overhead, other places to look for efficiencies include automation, service centers and outsourcing.
  • Consider consolidation. If your agency’s production is spread out over 25 carriers, you are probably missing income opportunities. Consolidating your book to a core number of quality companies and wholesalers can lead to increased profit-sharing and incentives for your agency, as well as deeper partnerships.

Given the uncertainty and unknowns, developing a “Plan B” workaround and incorporating alternative approaches within your agency’s 2021 business plan is a good idea. If 2020 has proven one thing, it is that businesses that have been able to pivot their approach to meet the moment are the ones that have become stronger amidst the crisis.