How To Manage an Insurance Agency

Let’s be honest, there is no playbook out there for how to manage an insurance agency. Insurance agencies come in many different shapes and sizes. Agencies can have different niches, sizes, and visions. How you get to your end goals may all be different; however, running a successful, low-drama, growing agency may seem challenging. 

Well, this blog will change that. We will unlock the secrets to managing an insurance agency.

Here are a few things we will review in this blog:

• The need for a clear vision
• Annual strategic plan
• Job descriptions
• Metrics
• Values
• Performance-based pay
• Accountability
• Strong, passionate, well-trained leaders

Clear Agency Vision

When you think about how to manage an insurance agency, the first step is clearly identifying where the agency should be in 10 years. Without a clear vision, you are band-aiding problems and not fixing them for the long haul.

An example of this is hiring out of desperation rather than preparation. When you aren’t clear about what you want your agency to become as it grows, you end up making decisions for today. Too many decisions made for today, rather than for what you want to develop into, cause waste, confusion, and more time.

How To Develop an Agency Vision

Agency visions aren’t something you can smack down on a napkin and say: “I got it!” Agency visions are also not prisons – they can change and evolve over time. The idea is that you are charting a long-term course that pulls you into the dream mode of where you could take the agency. 

10 years is enough time for you to think through all the many hurdles you will face and to dream a bit.

When creating your agency vision, feel free to be bold – putting it out there may hold you accountable. This also allows you to clearly communicate to your team where you are going. If team members believe in the vision, they will go all in. 

For those who want everything to stay the same, they may find another place to work, and this is 100% okay. You don’t want people on the team who are resisting the direction you are destined to go.

Once you have developed 4-5 sentences on where you are going, you need to bring it to life. Consider creating mouse pads and posters, and opening every meeting by reviewing it. The more everyone knows about it, the more everyone can contribute to it.

Annual Strategic Plan

With the vision in place, you can now identify your 1-year plan. Visions are achieved with consistent progress toward your goals. Thinking 10 years ahead is fun – it’s the dream space. You need to get 10% toward your goal this year. Hope can’t be our strategy, so you will need to identify the first year’s expectations, goals, resources, and training.

When you think about how to manage an insurance agency, alignment comes to mind. Oftentimes, agency owners are visionaries. This type of personality is well-suited to start a business and provides a great deal of value. 

The downside of this type of person is that they have no shortage of ideas, can shift priorities quickly, and often overwhelm the team. With a strategic plan, alignment starts. To create a strategic plan, you need to have an overall agency strategic plan as well as one for each department.

What To Include in Your Strategic Plan

• Vision for the agency/department for the year – ask what success would look like this year?
• Break this into the key objectives that need to be tackled this year
• Identify each quarter’s departmental projects and metric goals
• Recap the desired outcomes
• Identify the resources and budget needed
• Detail how to track each metric and project

Once you get clarity on the mission, your agency managers can help you execute the plan. 

Job Descriptions

There is a great quote from Brené Brown: “Clarity is kind.” Much dysfunction in agencies stems from unclear expectations. We have also seen many horrible job descriptions, which may be outdated, inaccurate, or more like to-do lists. Good job descriptions should be reviewed quarterly with the team members and updated annually.

You may have heard this in your agency: “I’M SO BUSY!” Busyness is a grievance, not a badge of honor. When considering how to manage an insurance agency, understanding everyone’s role and how people work together is critical. Clear job descriptions help everyone understand what to do and what not to do.

Think of it this way: is everyone busy, or are they not following the protocol?

• Do some people handle work they should be delegating?
• Do people focus on what they like to do versus what must be done?
• Are the priorities of the day and their roles clear?

A job description is a great way to organize everyone and hold the team accountable. If you need a boost, check out our Agency Job Description Process Pack. 

Agency Metrics

I am so unclear on how to manage an insurance agency without access to metrics. Metrics are a journey. Oftentimes, the initial data is a dumpster fire. Each team and department needs to have a part of their projects on the strategic plan to get it right. This can include understanding how to run the report, how the entry impacts the data, and getting comfortable reviewing the reports.

The bottom line is that without metrics, you have no transparency and you are operating the team with feelings, not facts. 

To really manage an insurance agency, you need to have metrics to solve the following issues:

• When to hire the next team member
• Who is backlogged and needs help
• Are people documenting properly
• When is their book seasonality
• New business goals and standards
• Lost business: where are people going?
• Achieving growth goals
• Identifying clues to potential issues
• Confirming when to celebrate success
• Holding the team accountable
• Providing team transparency
• Fixing inaccurate data quickly

While organizing reports is a challenge, it’s ok – it’s something that must be done to effectively manage an insurance agency. You won’t regret tackling it right now. If you need some help, our Agency Assessment is a great place to start. 

Agency Values

When we work with agencies, values are something a decent percentage of agency owners say they don’t need. The APP team often has to have a bit of a “come to Jesus” meeting about this. Every single agency needs a set of values. 

It makes all the difference in the world for key objectives:

• Hiring and finding the right team
• Making critical decisions – Always review your values for guidance on how to handle situations
• Handling team conflict – Often, values clarify gray areas
• Celebrating team members – Values help you find ways to recognize the team

Here is the reality: we have all made a bad hire. A bad hire may be great at insurance but completely disruptive to the team. Here is how you know you have a “team terrorist” – you avoid trying to speak with them. 

Think about this: you are paying someone you want to avoid. Values allow you to hold the team accountable in gray-area situations. 

Performance-Based Pay

Everyone wants to make more money, right? The challenge in agencies is that there is a pay threshold for each position. We find that some agencies overpay, some underpay, and some aren’t sure what to do.

Compensation can be prickly – for the right people we always want to take care of them and manage expectations. I’m sure in your management of an insurance agency, you’ve had the awkward review meeting where you deliver a raise and have no idea if the person is satisfied!

At APP, we handle compensation very directly and transparently. When I was a team member, I always hated awkward compensation conversations. I never knew what to expect or ask for. As a manager, I have also struggled with determining what to pay people while balancing the company budget. Whenever something feels icky, I have the itch to fix it. 

Here is how we recommend handling compensation:

• Ensure you are paying fair and adequate wages (based on current times). You can search online or look on Indeed for other comparable salaries.
• Identify what is important to your team – is it health insurance, time off, or bonuses.
• Create performance-based pay options. We love our agency growth quarterly bonus. Distribute 10% of the revenue growth of the quarter to the team. You do need to show them weekly numbers from your management system (see the Metrics sections – you need to clean up first!).
• Quarterly bonuses – we have quarterly bonuses for hitting project and metric goals.
• Christmas bonus – 1 week pay.
• Annual 3% salary raise for cost of living.
• We post this every single January so everyone knows what to expect – this includes our Virtual Assistants.
• Then each year for exemplary performance, we identify team members who are crushing it and provide them a new title, updated job descriptions (they take on more responsibility for the role), and increased pay.

Compensation is a big part of how to manage an insurance agency. Honor your values and strategic plan, and pay for performance. 

Accountability

Nothing freaks out agencies more than thinking about accountability. How do we hold people accountable without them fleeing? Yes, the wrong people will leave (insert hand claps here). Let’s be honest, do you really want people on your team who shy away from accountability? Accountability is healthy – we call it telling me when I have spinach in my teeth.

We often struggle with accountability because there is currently a low level of it. We may not yet have the tools, such as job descriptions, metrics, or values. Start there and build the structure! When you start showing where you are going, some people will depart because they see what’s coming and they are not interested in being excellent!

What happens when you don’t hold people accountable? You lose the best people! Good people see that some are getting away with murder and then follow suit. As an agency manager, your role is to hold people accountable for following procedures, hitting goals, or using new technology. Don’t fear accountability; fear what happens if you don’t hold people accountable.

Strong, Passionate, Well-Trained Leaders

You get your insurance license and then have to learn real insurance. You do well and get promoted, and now you get to manage people – but where is the training? Our new Agency Ascend Leadership training is here to help! 

Leading people, especially your peers, is challenging. A well-trained leader is critical to success. This person needs to train the team, communicate, review metrics, and solve problems. Too many agencies have team leads but fail to get them to the next step – really building leaders or managers.

Without a strong, passionate leader, the team will become stagnant. We sometimes underestimate the power of a great leader to inspire, coach, and handle difficult matters. Your biggest expense is payroll. Having someone manage the team is critical. The US Military only allows 6-8 direct reports to any one leader. 

Let’s develop great team members and give them the tools they need to build effective leadership skills.

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