How to Scale an Insurance Agency: Best Practices Guide

Growth is an important concept in any industry. Many independent insurance agency owners want to scale because they want to grow their book of business. 

The real question they have is: how can they scale their insurance agency? It isn’t as easy as just saying to them, “Hey, increase your marketing efforts.” There are several nuances when it comes to answering this question. Today, I will share some in-depth yet understandable info that can help you. 

In this blog, you’ll learn about:

• How technology can help you become a more efficient business owner
• What horizontal industry expansion is and how it can give you more market access
• How capitalizing on your strengths as a leader makes more successful agents in your office
•  The importance of knowing what your time is worth and how delegation can help you meet your work and personal goals
• How joining an insurance agency network can help you meet and exceed your agency growth targets

It’s going to be an exciting conversation. I’m glad you’re here for it. While you’re here, make sure you sign up for my mailing list. Members of my mailing list receive amazing tips on how to make the most out of their independent insurance agency careers. It’s something you definitely don’t want to miss.

Technology: A Business Owner’s Best Friend

Technology may not seem like it, but it can be a business owner’s best friend. I know that it can be overwhelming, and it can seem like technology can be a major distraction.

Yet, when independent insurance agencies use technology the right way, it makes them more efficient. They can become an agile business. They can scale by accessing untapped revenue pools with a lower margin. 

Think about it: social media platforms are free. Starting a Facebook business page costs you nothing if you don’t have one. 

Successful agents use social media to promote their product offerings and help boost their business volume. This isn’t the only way, of course. It is just one example of how to scale an insurance agency using technology. Food for thought: you probably can’t think of a single person in your book of business who doesn’t have a social media account.

Technology also helps remove the tasks that slow you down in your day-to-day agency life. Things like an agency management system create efficiency in how your insurance operates. It also provides you with specific data that you can use to cross-sell insurance products to the clients in your book of business.

Horizontal Industry Expansion for More Market Access

Another way to scale your agency is horizontal industry expansion. If you’re scratching your head on that one, let me explain. Horizontal industry expansion means that your agency’s growth targets complementary areas in similar services. Think about how you may know that a CPA provides a wealth management service. That’s an example of horizontal industry expansion.

The melding of financial services is a very distinct and recent occurrence in the past few years. Most of that is partially because of regulatory constraints and the inability of the government to keep up with the changes in the industry. Part of it is also because of the inability of people to recognize what’s happening around them.

Previously, the value proposition of independent insurance agencies was to include financial advisement services as an extra product offering. They helped their clients under their risks and insured against them. Then, they were well-connected with financial advisors who added different parts of the business. They also knew lawyers, CPAs, and wealth advisors. So they brought their clients to an entire team.

In the last 20 years or so, insurance agents have, at the lower end of the scale, personal insurance, and small business insurance have become more commodity-focused and price-driven. This focus has also made its way up the chain, too. Unfortunately, this has also occurred with the bigger players in the insurance business because they commoditized their approach to the business and forced market changes.

These market changes convinced many independent insurance agencies to look away from this horizontal playing field and the team-based approach. It’s one great way to scale and to better serve your book of business. It’s crucial to consider bringing these experts back under one roof again, just as some bigger agencies are doing.

Smaller agencies can also do it by leveraging technology, as we talked about earlier. The key mindset is to think of one word: collaborate. You don’t have to literally bring everyone under one roof since Zoom and Microsoft Teams exist. Use technology and access untapped revenue pools while running an agile business by collaborating with other professionals.

Capitalize on Your Strengths as a Leader

Speaking of collaboration and working as a team to serve your book of business and working to scale your business, let’s talk about your strengths as a leader. I’m the CEO. I don’t manage people. No one reports to me. Managing others isn’t one of my strengths. Everyone has strengths and weaknesses.  

Think about this: Olympic athletes are really good at their thing. They might be pretty worthless about anything other than that thing they do…but we know they happen to be the best in the world at the thing they do, their sport.

I’ve always recognized that I have glaring weak spots.

I’ve played team sports. I’ve always appreciated it when someone blocks for me so I could run the ball. As you go along in business, especially as a business owner, knowing your strengths and weaknesses as a leader is important. And it’s critical to know this so you can scale your agency.

Know What Your Time Is Worth (And Delegate Accordingly!)

If you could only focus on the parts of your business that you find personally rewarding, what would those be? What are the things that you look forward to doing every day? Take a few minutes to think about that. You can even write down your answers.

Think about the things you don’t like doing, the things that maybe even you hate. Of course, as a business owner, there are still things that need to be done. What are those things? You can write those down, too.

Most people, including you and me, do much better if we focus on our personal goals, daily goals, and business growth when we focus on the things we enjoy. We accomplish more when we do things that we love because we look forward to doing it. For example, I have no direct reports. I don’t manage anything. Why? Because I’m a crappy boss and a terrible manager. And yet, I’m the CEO.

So, you take the things you love, and you do those things. You can find the right people to handle the things for your business that need to be done that you don’t want to do or don’t have the skills to do. I don’t want to manage people, and managing people isn’t my best skill. It’s not a place where my focus is best suited.

There are two ways to use this concept: focusing your time on the things that matter to you and delegating what you do for continued success, and meeting agency growth targets.  

The first is to do more and more of what you enjoy doing because those things really move the needle when it comes to business growth. The second is to do less and less. Get into delegation! The things you aren’t good at or don’t want to do, find the people who can do them and who want to do them and delegate.

Think about what your time is worth. Your time shouldn’t limit the growth of your business. You should delegate because of what your time is worth. If your time is worth $100 an hour as a salesperson and it’s worth $25 an hour as a clerical person, you have to make a decision. Would you continue to do the clerical work even if it’s fun, knowing you’re wasting money?

You must consider the priorities, and you must delegate to scale your business.

Join an Insurance Agency Network for More Access to INSURANCE Markets

Another great way to scale your business is to consider joining an insurance agency network. As an independent agency, it can be difficult to negotiate with insurance carriers to get certain benefits or access to markets in certain areas. 

When you join an insurance agency alliance of this nature (like OAA, for example, which I founded), you get more market access and contact with other successful agents. You get more information on dealing with business complexities and training on product offerings. It’s a cost-effective way to get the support you need to run an agile business while also getting more market access.

Learn More About INsurance industry Growth TargetS

Discovering how to scale an insurance agency for yourself takes some thought, planning, and action. It depends on several factors that are unique to your agency, including the agency growth targets you’ve set. To learn more about growing a successful independent insurance agency, make sure that you sign up for my email list. And if you have questions? Drop me an email! I’d love to hear from you.