5 Ways Your Insurance Agency Can Make MORE
Here at APP, we make sure that the Ridiculously Amazing Insurance Agent Podcast is highly informative to listeners. We want you to get something out of it that you can directly apply to your business and benefit from, but we knocked it out of the park this time.
“Insurance is very niche, and the financial struggles agencies face is unlike any other. Yes, it‘s a lucrative industry, but only when you do it right.”
For this episode, we spoke to Don and Ro Polyczynski. If you have the pleasure of knowing this couple, you’ll already know that they are both so knowledgeable and kind, and working with them, in any capacity, is a pleasure.
Insurance found the couple by finding Don first. He started in an agency and quickly became their CFO. He would attend conferences and events, where Ro would join him.
And for her part, Ro is an MBA and can talk business with the best of them. She learned this industry in no time. No one even asked if she was in insurance; they just assumed she was.
As time went on, insurance felt like a perfect fit. At one of these events, Don was approached to be a “virtual” CFO for a company that needed financial support and, well, the rest is history.
They developed their own business—RD Advisory, wrote a book, and created a virtual CFO program—AgencyCFO—unlike anything we have seen.
The Problems
Insurance is very niche, and the financial struggles agencies face is unlike any other. Yes, it‘s a lucrative industry, but only when you do it right.
Sadly, it’s not uncommon for it to be done kind of wrong.
So, very quickly, Ro and Don noticed a pattern and sought to correct it. They saw that quite a few agencies were making the same set of mistakes over and over.
Here are the top five and what they recommend you do about it:
#1 Lack of Focus on Results
Sometimes, we want to ignore the numbers and go by feel, but that is a mistake. As Kelly says, “Numbers don’t lie, and feelings don’t have a brain.”
We understand that you believe that this process is working or that producer is making progress, but if the numbers are telling you “no,” you need to listen.
The Fix = Believe the numbers, the results. Follow the direction they give you. You should be looking at your results (revenue, profitability, cash flow, new business, and retention AT LEAST MONTHLY.
#2 Next Shiny Thing
We love conferences. They inspire us and educate us in ways we can’t experience anywhere else. But they are not to be used as a north star.
As Don says, “If we do the ordinary well, we will be extraordinary.” All too often, people want to make you feel like they have a solution to your problem that THEY discovered, but if you look closely, people are just “reinventing the wheel.” This happens a lot in fitness.
Sure, there are different strokes for different folks, but in general, if you do the boring stuff like exercise and watch your diet, you’ll lose that weight.
Also, that speaker is an expert in that thing, but if you took a look inside their agency, they probably aren’t running a perfect ship, either.
The Fix = Work to be great at the ordinary and watch people say, “wow, how did you get there?” And you’ll find yourself saying the same thing we are. Be inspired by the conference, but don’t try to build Rome in a day.
#3 Righting Compensation
We can all probably all appreciate the importance of compensation. It is the top reason people go to work among a few others. Everyone, including the owners, has to be paid, right?
But Don and Ro have seen a pattern that we have also seen, and that is called “Your Compensation is Out of Whack.”
For example, a producer might be overcompensated to the point where service people aren’t affordable. Because that producer is making a salary, a percentage of new business, renewal, and the owner is paying for marketing (because they are in-house, they are not out generating leads).
Another example is legacy employees. They are burnt out, usually not tech-savvy, and enjoy stirring the pot behind the scenes, yet we give them an incredible salary while making commission and renewal.
And then, to flip the script, we have account managers who are doing producer’s jobs but don’t make a commission and do the account manager’s jobs where they have to have the hard conversations with the clients day to day. On top of all that, while they practically run our business, we pay them entry-level.
The Fix = Give people what they deserve. Don’t give it all to people who don’t work for it while undeserving those who do. Find a balance. You’ll definitely get more team buy-in if you do.
#4 Lack of Focus on Retention
We often feel compelled to work our hardest for new business in this industry. We want to add to our book as if that is the answer to all of our problems, but what are we doing for our existing book?
The Fix = Retention is one of your agency’s easiest ways to make money. You already have that business; you need only attend to it a bit more.
#5 Carrier Contingency and Bonus Management
Don and Ro have a saying “if you live by contingency, you die by contingency.”
And it’s true.
If you are misusing profit to the point where you rely on contingency, you have some issues.
Also, regarding carriers, they are out to make money, and they’ll do whatever they need to do to keep your staff working deals for them. The cheapest is not always to best, and no one wins if their commission is crap.
The Fix = You have to dial it back and start managing your carriers and only working with those that are willing to work with you honestly. Also, move your dependency far away from contingency.
The Solution
There is no one size fits all solution for you, but this industry does have its age-old money issues and those have their usual fixes. Don and Ro have developed a program that allows you to have a CFO working with your agency and for your agency.
Usually, you only see full-time CFOs in agencies between ten and fifteen million in revenue. It makes sense. It’s a lot of money that takes an entire team to manage and protect, but with their program, your agency can benefit from their experience and guidance.
They will help your insurance agency make more money, and if these issues are a concern to your agency, you might consider reaching out to them.
If you are interested in Don and Ro’s message, you can find more about them HERE(link).
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