Talent
It comes as no surprise that an agency’s ability to attract and retain top talent will save them a tremendous amount of money in the future. Independent insurance agencies have overwhelmingly reported that employee turnover is a top risk they face in upcoming years. A recent study from the Center for American Progress estimated that for positions earning less than $75,000, the cost of firing and hiring a new employee was roughly 20% of that position’s salary.
Agency Operations Procedure Manual
Consistency in practices and procedures is a critical component to efficient agency operation as well as E&O claim prevention. Adhering to procedures will not only establish a pattern of invariable practices aiding in the defense of an E&O claim but it will also improve customer service among agency personnel. Procedure manuals should be reviewed at least annually and updated to reflect changes within the agency.
Data Protection & Privacy Regulations
Handling and protecting sensitive information is now one of the most critical responsibilities faced by the modern insurance agency. Data breaches are occurring as often in small businesses as they are in large businesses. It is critical that insurance agents understand and comply with the requirements of the federal and state regulations, such as the Gramm-Leach-Bliley Act (“GLBA”).
Coverage Checklists
Using checklists can not only help an agency increase revenue, but it will also help reduce E&O exposures and streamline a process. It is easy for us to forget things. When you do something that involves multiple steps, it’s likely that you can forget one or two of them. Using checklists ensures that you won’t forget anything and is a helpful tool for onboarding new employees.
Documentation and Agency Management Systems
Documenting all interactions with customers and carriers and every insurance transaction can be critically important to the defense of an E&O claim. Without time-stamped documentation, an agency will be left with little more than its employees' memories of conversations that may have taken place years earlier, and your E&O carrier may recommend that you settle your claim.
E&O Limits
Determining the proper limits for your agency is one of the most important decisions you can make to protect the agency’s future. Agents need to consider how much they could afford to pay out of pocket as well as the worst possible mistake someone within the agency could make. Those figures provide a good idea of potential financial impact and the E&O limits to consider.
Marketing Plan
With the eruption of digital marketing and the diverse client-base an agency needs to target, having a robust marketing plan is important for agencies of all sizes. There are many reasons a marketing plan can have problems, but fixing those problems is essential to ensuring growth and prosperity for an agency.
Mission Statements
Many agencies claim to have mission statements, but few of them are understood and followed by employees. If your customers were shown your mission statement, would they agree that it describes your business? If not, it is important to take another look at your mission statement and then use it to develop your strategic business plan.
Strategic Business Planning
Oftentimes the idea of strategic business planning can seem daunting to agency owners and key decision-makers of the business. Setting aside the time to determine what you want your business to look like and how you are going to get there should be a top priority. Putting these thoughts on paper is a worthwhile exercise because it solidifies and melds the thoughts of many individuals into a plan which everyone can believe in and work towards.
Perpetuation Strategy
You might not be shocked to hear that agency principals are getting older, but did you also know that perpetuation remains a very low priority? There is so much to consider with an agency perpetuation plan: agency value, buy/sell agreement, agency ownership, internal, external, planned retirement, sudden death, and they are all important to prepare for as part of the plan of the agency life cycle.
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