Who is the most important group in your insurance agency?
Agencies have three typical organizational scenarios:
- Producer focus
- Carrier focus
- Client focus
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Purpose of this paper: Explore the ways that independent agencies are structured and how relationships are formed and maintained. Understand how the structure of the agency directly impacts the results the business is able to generate.
Think for a minute about the way your agency is organized. What is the primary focus of the business? Is it to sell and service insurance products? Or is it to work with a group of clients that need help creating an organizational safety net and attracting and retaining quality employees?
If you’re like most agencies, you’re likely thinking, “Well, we do both.” And, that’s probably true. Now, think about which one is your focus and which is simply a result.
If you are focused on finding someone to buy an insurance product from you, the result will be that you also provide some marginal help in creating that organizational safety net or to attract and retain quality employees.
Conversely, if your primary focus is first and foremost on helping your clients create a safety net and to attract and retain quality employees, then one result may be the sale of an insurance product. In this model, an insurance product is just one of many ways in which you may be able to help a client.
What you choose as your primary point of motivation determines what will be the central focus for your company – the Center of Your Universe.
Agencies commonly have producers as the Center of the Universe: it all centers around sales people who are responsible for selling products. Everything in the organization is then designed to support and service the efforts of the sales people – from the service team, to the compensation programs, to training, resources, and processes. In this scenario, the client becomes the result of the sales efforts to sell a product. And then the producers generally maintain a stronghold on the client relationship out of fear of someone internally “screwing things up.”
Characteristics of the Producer-Focused Model | How many apply to you?
o Revenue is only generated when an insurance product is sold
o A different set of rules apply to producers than any other position
o The producer “owns” the client relationship
o The compensation program is built to serve the producers
o The service team works to keep the producer happy
o Producers dictate new carrier relationships and procurement of new solutions
o Leadership tends to work for the producers rather than vice versa
o Resistant to change
o Silos exist throughout (e.g.: Sales vs. Service, Commercial vs. Benefits, Management vs. Everyone Else)
Another core problem with the producer as the Center of the Universe is where the agency/brokerage loyalty lies and where ties are the strongest.
In the typical independent agency model, or producer-focused model, the agency has its strongest, most permanent ties to the carriers.
In a model where the client is the Center of the Universe, the needs of the client business are the central focus and everyone in the agency plays a role in educating buyers, uncovering buyer needs, or helping clients solve their challenges. These agencies use a combination of insurance products, non-insurance products, services, and consulting to help their clients build stronger businesses.