Key questions for Agents to consider: How is your agency competing against these large firms that spend significant dollars on technology? If selling the agency is part of the goals, how is your firm positioned for acquisition?
The number of independent agencies continues to decrease from 44,000 in 1996 to less than 37,000 in 2006 (Future One: 2006 Agency Universe Study). The decrease is due to a flurry of consolidations, mergers and acquisitions among the small regional and privately owned agencies; however, the size of the agency book of business is growing. In addition, the large brokerage firms are now targeting the multi-billion dollar small commercial market.
The competitive landscape is changing for everyone. The small agencies are now competing against larger ones that tend to be more efficient and effective with automation. This creates a paradigm shift of time to market, cost of doing business and rise in the service level expectations from customer and carrier. For the agencies that want to sell their business, being an insurance agency with a book of business is no longer good enough. Companies looking to acquire are looking for good agencies that are profitable, predictable and display substantial organic growth.
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