Tony Caldwell's Blog

Insights on entrepreneurship and strategy for the insurance industry.

Smart and Profitable Insurance Agency Staffing

You may already know this, but just to be clear, every agency has three main roles: sales, service, and administration. We've all got to have people doing all of those three things, but I would like to talk about a few aspects where I see people getting off track with where they want to go based on the people that they're hiring. There are lots of ways to improve the operations of your agency without spending more, or even hiring more, just focusing on an intelligent distribution of the three functions that every agency has to provide. 

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The first error that I see some agency owners making is they quickly pivot to being sales manager, even though they are great salespeople themselves. The truth is that if you're great at sales, you can handle a $500,000-$2 million revenue book of business, if you've got the right staff backing you up. And if you're in personal insurance, just cut that number in half. 

Agency owners need to stay in the sales role if that's where their gift is, instead of getting people up in the morning and putting them to bed at night. So first thing in sales, try to find your way clear to backfill your agency on administration, and customer service, so that you can stay focused on selling.

And by the way, if you're a great salesperson, building a sales culture becomes so much easier if you don't abandon the role. We’ll talk about this again later.

If you've got sales people, motivate them to round accounts and pursue renewals. Consider offering a higher commission level when they sell 2 or more policies to the same customer, and perhaps change your renewal commission rate. Experiment with this - I guarantee you that your revenue will go up without having to increase the number of clients.


It's important for the agency owner who wants to continue to power growth in the agency to hire an agency manager, or at least turn over the agency management role as much as possible to somebody else.

I remember the day that my partner and I decided to do that. We went from having a line at the door of the office, full of people with questions that really we really weren't great at answering in the first place, to being able to focus on our work. The phone quit ringing with inner company questions, it was great! This is how we got back to growing the agency through sales, which way more than paid for that administrative person.

The point I want to make about administration is you got to have it, and the earlier you can dedicate somebody else to the management function of your agency, the faster you're going to get back to agency growth. 


The last point is about the service function, which is increasingly going away. Why? Because technology's making it more and more possible for customers clients to service themselves, and studies show that they actually prefer it in most cases. Much of the service work that we're doing can now be done with self service, if you'll just use the tools in your agency management system: you can put them right on your website and eliminate a ton of work.

The other thing you can do is transfer the easy jobs to a service center, and they'll do that cheaper - service centers cost about half of what in-house service does. Customers will also be happier, because they get support when and how they want it. 

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That said, the service people that remain in your agency need to be also salespeople. The average insurance agency in America sells about one and a half policies per client, when that client is buying seven, eight or 10 policies from someone else. Why is it that we are not better at rounding accounts? It's simple: it’s because we have customer service people who are not selling. 

The people we hire to service our clients are not the kind of people who like to ask for the order, and we're not rewarding them for upselling or rounding accounts. So if you want to double the revenue of your agency, start changing the nature of the customer service people: hire better, train them to sell, and reward them for it. Use something like Caliper or Culture Index, or whatever it is that you use, to hire service people who are not afraid to ask for the order.

Focus on KPIs

One last thought is that you have to make liberal and rigorous use of KPIs to evaluate the work of your 3 types of staff. When I look at agencies, either because they are trying to sell their business or because they want to improve their bottom line, I find lots of waste, because their customer service people aren't servicing as many dollars of commission as the best agencies. 

Or perhaps their salespeople aren't selling into a big enough book of business. So KPIs help you to identify the opportunities in your agency where you can improve. It may be very possible to double your bottom line with no more clients and no more revenue, just by looking harder at those places where you can improve using key performance indicators.

If you'd like to have a conversation with me about this, I'm available! And I also got a lot of resources right here on the website, beginning with The UnCaptive Agent, which is a book written for new agency owners. It’s chock-full of great operating advice, including ways to minimize expense and maximize the potential of your staff. Hope it helps

3 minute read

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