Introduction: Hard Insurance Market

This is probably not a news flash, we are in a hard insurance market. What may be a news flash is how to not just survive it but actually use it as an opportunity. We will be breaking down how the agencies that work with Agency Performance Partners are using this market as an opportunity to springboard ahead and fuel their agency goals. Too many agencies are just treading water, getting tackled every day. These agencies are playing soccer on a football field. A dramatic hard market is an opportunity to position your agency for success.

When you face adversity you have two choices:

Kick butt and take names
Wade through it and hope for the best

I’m here to tell you the first is way more fun!

When you make the decision to thrive in the hard market you will start to take back control. Rate and underwriting guidelines will not be the boss of you! Taking back control means you will go ahead and start to craft a strategy to capitalize on a changing market. While your competition is complaining about rate, lack of appetite and being short staffed you will take the bull by the horns and charge forward – even if it’s hard and you’re running into the wind. Go for it!

Here is a breakdown of what we see as challenges and opportunities in a hard market:

Challenge	Opportunities
Increasing rates and the need to manage client expectations	The agency is growing and we can get proactive with our clients
Team Burnout	Opportunity to be a war time CEO and lead the team – the best agents will be built in this market
Lack of Staff	Become more efficient, tier clients, use virtual assistants, embrace technology
Market Appetite	You will only write the best business with low loss ratios your writing less but writing better
Upset Clients	Opportunity to connect and build relationships we have to earn our commissions for the next 2 years

Check out our Ridiculously Amazing Insurance Agent Podcast on what we are seeing in the market!

In this blog we will share with you how to use this market to thrive and not just survive in a hard insurance market.

3 Minute Video 1: What Is A Hard Market In Insurance?

Strategies To Survive A Hard Market

If you aren’t interested in capitalizing in a hard insurance market let us help you at least survive it. There is no doubt that in this market there is more work to do. You need to operate your agency for survival mode. This means that we cannot keep operating like we did in 2022. Survival demands that you conserve your resources, hunker down and wait out the storm.

Leading Your Team in a Hard Insurance Market

Surviving a hard insurance market means that you will need to lead the troops. Just like a captain who is going through a storm at sea the team takes the lead of the captain. You must remain positive and lead. Your team needs to know the plan to execute this includes who to remarket, who to prioritize and what markets are open. You can imagine that a captain of a ship is negative going through the storm and the troops will not be optimistic. Make sure you are leading and managing your team.

Get our complimentary download on How To Lead Your Team In A Hard Market

Running Your Agency For Efficiency

When a hard market means more work you have to plan to be more efficient to ride out the hard insurance market storm. Now is the best time to organize your agency to ensure you are spending your time correctly. That means you must prioritize your best clients and relocate your worst clients to your competition. Many agencies were backlogged and inefficient before the hard market. To survive this market you must create efficiency. This includes:

Tiering and prioritizing clients
Identifying agency standards
Creating your ideal client and walking away from new business
Plans for who will be remarketed
Who will you proactive with
Use of technology
What can you trim, trash or transfer in the agency

You are operating the agency in stormy times – you cannot do the same thing you did in 2022 that plan will only lead to extreme burnout.

Building Your Team Confidence

Let’s be honest your agency needs a hard market hero but your team make not feel so confident. Everything they could have done previously they can’t do. It feels like being in a foreign country. So what do you do? You have to pump up your team and show them that they are winning:

Share the facts of metrics
Recognize them for the hard work they do
Give the team scripts
Role Play
Let them clearly know your definition of a good job so they can feel like they are winning

Confidence comes with practice the more you practice your approach the better the team can operate.

3 Minute Insurance Agent Burnout In A Hard Market

Hard Insurance Market Plan

Most people like a plan, insurance agents love a plan. Provide your team a roadmap each week of what to focus on and the market condition update. Giving your team the facts and then following up with bi-weekly coaching meetings will show the team they are doing a good job and you can identify when your on course or off course.

How to Thrive In A Hard Insurance Market

Now we know because you are here you don’t just want to survive you want to thrive in this market. Remember with any change there is opportunity. Some of your competition will get stuck in just dealing with the hard insurance market. Not you, you are going to use it as an opportunity to grow. So we will now help you see where the opportunity really lies. We will expect that you have mastered the survival mode and now you can get up and on to really building something special.

Hard Insurance Market Retention Strategies

Retaining clients will become more difficult in this market. Let’s face it if in 2020 you knew we were going to face Covid and then a hard market you most likely would have started positioning your agency much differently. However, you know the best time to plant a tree? 20 years ago or right now. Let’s talk about what we can do right now.

The number one driver of retention is the proactive renewal review. For years now agencies have come to us to help them start getting proactive. Agencies have tried and some failed to really get them started. What we need to focus on in this market is you need to build trust with your clients. Trust happens when we get proactive and really work with clients to understand what is happening and what options they have.

If you have tiered your clients your objective is to make sure the top half of your clients are getting a proactive renewal review. This review needs to be scripted out with a checklist to ensure every call is consistent and about coverage not price. When a lower tier client is non-renewed or wants to be remarketed a review must occur. Your goal is to delight the top tier to continue to earn referrals. These clients must be prioritized. If you need help with getting renewal reviews started we have a program that can help!

If your team needs training check out our online training!

Efficiency Strategies for a Hard Insurance Market

Now is the time to make moves! If your agency has been struggling with staffing – it no longer needs to be a challenge. Here are the items working in your favor when it comes to staffing:

Many of the big players and captive agencies are doing layoffs
Virtual assistants are more mainstream than ever
Your management system has efficiencies in it you may not be using

We see many agencies hold on to inefficient people who are the wrong people out of fear. We want you to focus on efficiency over people.

At Agency Performance Partners we actually created an agency efficiency program. You may not need any more people, you may need to train your team on how to kick butt and be able to prioritize work. When you are working on efficiency here are some of the items we recommend if you want to thrive in this market.

If you have an older team can you convert them into a trainer/mentor and allow them to work a part time schedule?
We Trim, Trash, Transfer and Scale
- You develop a virtual assistant team
  - Traditional work values, reduced management, limited IT issues, repeatable work that can be done uninterrupted
  - You trim everything that is not licensed work from the licensed team
  - Account Managers elevate to account executives (reviews, high level claims, significant endorsements, cross sales and referral generation)
- You Take the bottom 50% of your clients and you pool them
  - No dedicated rep. It goes into a pool of trainees
  - They are encouraged to cross-sell them, move them to automated payments, help them get into online self-serve methods and are incentivized to do so
- Your Agency Develops Leadership and Team Lead Roles
  - Fast Service (transactions)
  - Account Managers/Executives
  - Sales
- Invest in robots, AI and automation
  - There are insurance robots today to take manual jobs (download) off of people
  - AI can help guide a client to a solution (some prefer this)
  - Anything you can automate you MUST

Focus on service levels based on revenue.

Focus on New Business Strategies

New business strategies are a moving target in a hard insurance market. Underwriting guidelines are changing but again this is an opportunity. Instead of writing everything you will be able to only write the best stuff. What this means is you need a better trained and developed sales team. Your standards must level up to be sales professionals. In the past you could get away with having someone who could quote only – now you need a sales professional.

In order to master new business it is important your team knows the following:

What to turn away – we can’t have people burning their time on non ideal business
Niches to riches – now is a great time to develop niche markets
Cross selling at the point of sale – no more monoline sales
Follow up and follow through strategy – outline how many follow ups you are going to do
New business must be a priority!

One big way you can drive quality new business is from referrals. When you get the renewal reviews, one question to always ask on every review is for a referral! Also, many other agencies will be running ragged. Without a plan or strategy many other agencies will be focused on saving current clients so new business will get deprioritized. This means delays and frustration. Your agency can build and train your team on a great sales process that will help you thrive. APP has a sales process program just for your agency.

Mastering Agency Culture

Part of your role is to build a great culture so even in a hard insurance market your team is still thriving. The work may be hard but the work environment doesn’t have to be. Once you really get a team of great people it can be very empowering to focus on your culture. Your culture will help you find, keep and develop the best people. When you have a great culture people don’t look to leave, instead they look to refer their contacts to come work for you.

Here is how you can focus on building a thriving culture:

Team Member Career Plans
- Provide a clear path to success
- Tiers of each role based on tenure, hitting goals and honoring values
Annual Theme, Compensation, Roadmap
- Share the numbers on a monthly basis
- Annual Theme: Create an annual theme for your team to focus on
- Let the team know how they can make money and what raises are available on January 1st
- 1 year roadmap (account managers hate surprises) what will your agency focus on
The Owner Views The Team As Their Clients
- Owners have a lot of hats – but the team is your client
- Listen and clear out problems
- Proactive quarterly reviews of each team member
- Recognition
- Know your audience
- Proactively let people go early, celebrate wedding anniversaries with thoughtfulness, get the team involved in little league championships
- Team member hardship fund

Culture is very difficult for many agency owners to understand because they may have never worked somewhere that had a great culture. If you feel like your culture is off track our agency assessment may be a great program for you.

Boost your culture with Hard Market Agent Swag

Diversifying Your Agency

The final step is diversifying your agency. Now may be the time to focus on health, life or other products that are not impacted by the hard market. If you have focused on a coastal market you may want to expand a bit and go more inland. Growth is the name of the game so keep focused on what will help fuel your growth.

Team Training & Processes

A surviving agency will only focus on what is in front of them and think there is no time for training. We need to focus on developing our team regardless of market. Think about developing your team’s coverage knowledge, technology use and carrier appetite. At a minimum you want to give your team hard market scripts and skills on how to manage new client relationships. We have a hard market training program that will help your team thrive in this market.

Now is also a time to make sure our processes are onpoint! Your processes need to be developed around client tiers and putting the client in the heart of every single thing your agency does. If your agency has not documented your processes now is the time. Map out what does a claims, endorsement, renewal and more look like at your insurance agency? At APP we have 10 process templates to help get you started.

Conclusion & Agency Acquisition in a Hard Insurance Market

This hard insurance market does not have to be the end of you! Surviving is your first step but thriving is a huge opportunity. One item that I did want to cover before we let you go is the opportunity to focus on agency acquisitions. A few years ago private equity drove up the prices of agencies. Today, they have tanked out. However, many of the agency owners who may want to sell still remember the pricing of the past. Our recommendation is to wait it out and try to run them out of business. Yes, I said it directly. If you follow our plan above you will be able to earn their clients not buy them. You don’t have to worry about changing systems, onboarding difficult staff and you can cherry pick who you take. In addition, the carrier marketplace changing the carriers may cut commissions or not allow your agency to have a contract. The bottom line is that many agency sales (not all) are more dangerous than ever. Be cautious and make offers that are very much in your favor.

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Hard Insurance Market: How Your Agency Can Survive & Thrive