The hard market of 2023- 2025 limited the ability of many insureds to shop for other insurance options. Their rates were going up, their deductibles were changing, and their coverage was decreasing. However, if they tried to shop for other insurance options, they did not find many alternatives as insurance companies were not interested in writing new business.
Insurance companies are now seeing increased profitability numbers. As a result, they are increasing their appetite for new business and increasing marketing efforts encouraging insureds to shop. This is leading to an increased number of people actively seeking more competitive insurance options.
This presents both a threat and an opportunity to agencies. On the one hand, more of their existing clients are shopping. On the other hand, agencies that desire growth through new client acquisition have a great opportunity.
Who are the ideal clients for my agency?
This type of market is extremely time-consuming. If agents spend all their time trying to retain existing clients, they will miss a great opportunity to take advantage of the increased shopping that is happening. As a result, it is important for agents to have a clear answer to the question “Who are the ideal clients for my agency?” This means having a clear idea of which clients to focus on retaining and what type of customers to pursue for acquisition.
Please note, the goal is not to “chase away” clients, ignore requests, or treat people poorly. Everyone deserves fair treatment. In this competitive market, agents cannot effectively be “everything to everybody”. It is important to focus time and priority on the types of clients that the agency is best equipped to help.
For example, if an agency’s approach is to provide a holistic approach to clients, time spent trying to remarket monoline accounts without regard to other policies will not make sense. Instead, the agency should prioritize rounding the account and not spinning their wheels to save a few dollars on a monoline account, even at the risk of losing the monoline policy.
Client Acquisition Strategy
Agency owners also need to implement a client acquisition strategy that attracts the types of clients they want. This means developing a strong business development and prospecting plan that includes an investment in targeted advertising and referral marketing. Optimizing a strong sales culture will be critical to execute that plan. This includes hiring new sales agents or redirecting current agents to prioritize selling. Offering sales and producer development training to licensed agents should also be considered.
The softening insurance market means growth opportunities for agency owners. Experienced agents realize this may mean losing some clients during this market while they are bringing in new ones. Those who plan for it effectively know they can afford to lose clients that are less ideal for their agency and replace them with more ideal clients. The key is optimizing the net value gained through new customer acquisition.