An agency management system is essential to running an independent insurance agency. Many carriers or agency networks will not engage an agency without some sort of a system. More than 15 different vendors offer well over 20 different insurance agency management systems in the marketplace.
The vendors range from the larger most established vendors to smaller innovative vendors. The larger vendors typically charge more for their systems, but they may offer more support. The smaller vendors tend to have a more modern platform and are less expensive, however, they may offer less support. Less support can mean submitting only through online ticketing options and not phone service unless it can’t be resolved through a support ticket. Purchasing a system should depend on your long-term goals. If you plan to have producers, make sure that the system can accommodate producers and commission tracking. Since most now have mobile platforms or a mobile app, if you are inclined to use mobile, ask the vendors what apps are available. Some offer texting options, which allow staff to text clients if their policy is cancelled for non-payment or about other urgent matters. Purchasing a management system is like anything else. You need to investigate which system best meets your agency’s needs.
An important factor with a management system is the integration with carriers and the policy types that a system can download. Without downloads, your agency staff will have to input all of the policy information manually. You will likely need to do this for certain policy types, certain carriers and wholesale placed policies. However, it’s best to minimize manual entry as much as possible, as it’s more efficient and timelier when data is automatically downloaded. Also, having your staff input data can be costly, and input errors do occur. Before purchasing a system, make sure to see their current list of carriers and the policy types that the system is set up to download.
Management systems have trended towards hosted or cloud-based systems and continue to go in this direction. While in-house systems still exist, they may eventually be outdated, as this is becoming more antiquated and less likely to be supported.
You can find additional information on Insurance Agency Management Systems by going to:
Other Insurance Agency Technologies
New technology is being made available all the time, and many are customized specifically for insurance agencies. Even if they are not customized for insurance agencies, they can help you run your agency more efficiently and save on staffing costs. For example, having an electronic signature system can help you secure policies faster, as it makes it very easy for a client to sign rather than requiring them have to print, sign and fax back, and often when there is more work involved, people put that on the backburner. AgencyEquity constantly makes resources available to help your agency run smoothly from operations to marketing. Technology is here; it’s no longer the future, and agencies that make an investment in technology put themselves ahead of the competition. Starting an agency with a good technology infrastructure in place will create conditions for faster growth and are often well worth the investment.
For a directory and reviews of agency technology, I recommend:
Insurance Agency Specializations and Niches
Agencies that specialize tend to have an edge in specific markets they serve. While most agencies do not specialize, give specialization some thought, as it can bring in higher profit margins due to economies of scale. However, specialization also means that you will turn away accounts that are not among the types of business you target. This is like a tire store taking on other auto repair work from time to time; they won’t be good at it, it’s not as profitable, and it really doesn’t help their bottom line. If you do specialize, do it smartly and don’t get trapped into writing everything else. Just stick to your niche if you are looking to thrive over the long run.
I like specialization from a marketing standpoint, as there are many opportunities to get involved in trade associations, target online searches, and advertise in trade industry publications. You can gain a solid reputation in the class of business you target, as industry insiders would rather deal with people who are familiar with and understand their specific situation. It also facilitates referrals, as people in the same niche industry tend to know and network with each other. Using an agency name that reflects the niche that the agency is targeting can be huge from a marketing standpoint.
Even if you don’t specialize, think about narrowing your focus. Examples include high net worth clients, members of a local chamber of commerce or any group that shares specific characteristics. Just as with specializations, it will help in operations, marketing, and your bottom line. Lastly, remember that direct writers mostly do the same thing, providing auto, home and life insurance to middle class clients. These services are a dime a dozen, so standing out and being a little different eliminates a lot of the competition.
Having a niche puts you several steps ahead of the competition, which is huge in a competitive insurance agency marketplace. You know the underwriting, you know the best carriers, you will know how to put together the most favorable terms and you will be several steps ahead when explaining coverages to prospects. The best prospects pick up on this and they know who knows what they are doing and who doesn’t.
Guide to Starting an Insurance Agency Table of Contents
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