2020 Best Practices Study

COVID changed these realities and some agents and brokers are finding ways to prosper amongst the pandemic turmoil. The bottom line is that insurance agencies are a people-driven business. Rethink your personnel and how you work. Continue to make generous investments in your team - they are the lifeblood of your agency and the key to future success.

On a similar note to rethinking your agency’s foundations , it’s critical to pause and assess your client base and growth drivers, understanding how you can best maximize your current strengths and avoid any potential pitfalls. Is your agency too concentrated in certain industries? What parts of your book are thriving and struggling during the pandemic? Are there any significant concentrations in your book of business that simply don’t make sense?

In other words, how well do you know your customers?

Below are a few practical ways to better understand and proactively manage your business and client base:

1) Conduct an industry analysis. Do you have exposures in industries that are significantly affected by COVID-19 (hospitality, retail, restaurants, etc.)? Perform a full audit of your customer base over a specified account threshold that will cover at least 80% of your total book. Take proactive measures to reconsider growth investments in industries in which you are overweighted or that may no longer make sense.

Within your agency management system, enter clients’ Standard Industrial Classification (SIC) or North American Industrial Classification System (NAICS) code to identify client industries. Make this a required field when submitting new business. You are likely to find business concentrations and exposures that you were never aware of. 2) Conduct a Line-of-Business analysis. Similarly, is your book of business ideally balanced in terms of lines of business? Will an extended COVID-19 recovery impact your agency’s largest lines of business? Consider carefully how potential large- scale market forces might affect your agency’s performance and start thinking seriously about

Industries Worst Affected by the COVID-19 Job Crisis (Number of unemployed persons aged 16 and over in the U.S. in April 2020, by industry)

4.86M

Leisure and hospitality

3.22M

Wholesale and retail trade

2.55M

Education and health services

2.02M

Government workers

1.99M

Manufacturing

1.70M

Professional and business services

1.53M

Construction

1.42M

Other services

3.21M

Other industries*

*includes persons with no previous work experience and persons whose last job was in the U.S. Armed Forces Source: Bureau of Labor Statistics; chart by Statista

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