Are you looking for the secret to a successful agency perpetuation? We’ve got it in three simple steps:
Plan ahead
Plan ahead
Did we say plan ahead? As in…NOW!
Whether you’re handing off or taking over an insurance agency, it’s never too soon to start thinking about and planning the transition. A large part of that planning is deciding who will be taking over.
Many decide to perpetuate internally, thinking it’ll be easiest to pass on operations to a family member or long-time employee. But, as any owner knows, running an agency requires more than logging hours. It’s what you do with those hours that counts. Here are three real steps you can take towards a successful transition with your successor.
Don’t get us wrong, long-term investment in the agency is a good indicator for a potential successor. A good successor knows your agency and its culture. Though they won’t run it the same as you, knowing the history and the spirit of the business is huge.
You’ll also want someone who is up to the challenge. Taking on an agency is a big undertaking. Look for someone who deals well with uncertainty and thrives on possibility.
Finally, leadership is essential. A great successor will be able to bring the team together and clearly communicate mission, vision, and goals. They’ll be able to motivate employees to take on the transition ahead, celebrating successes and keeping the team positive through challenges.
Are you asking these five questions as you prepare for perpetuation?
2) Get Them Involved
Once you know who will be walking the transition journey with you, get them involved in the process. Include them in strategic agency planning and get their input. The more your successor knows the better. Give them insight into why things are done a certain way, how decisions get evaluated, and their implication on the agency. Sharing these elements with your successor helps them build a broader perspective for when they take over the agency.
You should also include your successor in all perpetuation planning (you’re starting now, right?!) going forward. Again, the more they know, the smoother it’ll be to hand things over. Part of this planning includes being clear on how you want to be involved post-transition.
Read the dos and don’ts of taking on the family business
Lastly, be intentional about bringing your successor into the key relationships involved in your agency. As an owner, you’re well aware the important role each of these relationships play. Introduce your successor to industry group members, board members, carrier contacts, and your agency management system contacts among other key players.
3) Lean on Your Management System
One of the most challenging pieces of your #agency #transition is exchanging information and knowledge. Your agency management system is an asset here. Be intentional about using it to store data and create a comprehensive picture of where your agency stands. Work with your successor to create and understand financial and other reports and map out best practices for use.
It’s helpful to get a re-training from your agency management system provider. Use these sessions to introduce your successor to the ways an owner can maximize system use and get your employees on the same page about workflows and best practices.
The dedicated service team at SIS has been part of numerous agency transitions, walking with owners as they navigate the seemingly murky waters. Our team has been praised many times over for their aid during transition, and our PartnerNet portal acts as a 24/7 resource for our partner agencies.
If you’re thinking about making a change in your agency, get in touch with us. Contact the SIS team at [email protected] to get connected today.
Back in January, we were all about resolutions and looking to the year ahead. It was then that Insurance Journal took a look at the coming trends for 2018. Though those long, dark January days have finally come to an end, the predictions, specifically the tech-focused, have stuck around. Halfway through the year, these independent insurance agency tech trends are showing no sign of slowing down.
For customers and agents alike, mobile access is a must. Agents use it to look up prospect and client info on the go. Customers all but demand it for on-the-spot claim filing. It’s one of the cheapest and easiest ways for independent agencies to keep up with the big names.
Self-Driving Cars
Automated cars are no longer a thing of the future. According to a Variant Market Research report, the self-driving car market is set to expand at a compounded annual growth rate of over 25% from 2016 to 2024. The same report predicted the market would reach $20 billion by that year. Independent insurance agencies need to take note as driverless cars will undoubtedly affect rates and how auto insurance is structured.
Similar to mobile, self-service portals provide control and convenience for insurance customers. With a self-serve portal, customers can view and change their information, ask questions, review rates, and pay bills whenever they want. This level of independence is a game-changer for customers. 65% said paying bills and premiums via mobile improved their customer satisfaction.
Wearable Tech
Items like the Fitbit and other wearable tech will likely have a large impact on insurance around rate calculation. These devices gather pertinent information on individuals that relate to their health and wellness, driving habits, and other relevant factors. As the number of wearable tech users increases, it could soon be leveraged for “safe driver” or other discounts.
Data Privacy
Kmart, Delta, Whole Foods and over a dozen other big names experienced data breaches so far in 2018. And, recent reactions to Facebook make it clear consumers are notokay with their personal information being shared. Independent agencies hold a lot of this personal information in their agency management system, making them particularly vulnerable. Suffice to say agency data security is essential in 2018.
At SIS we don’t just report on these tech trends, we listen and act. When our partner agents told us they needed more ways to better serve their customers, we introduced our Client Portal. When we heard agents needed on-the-go access to our Partner XE management system, we made mobile access happen. And, we’ve been committed to keeping agency data safe since launching the system.
We know many of these trends are more than passing and will soon become the norm. Find out how SIS and Partner XE have stayed ahead of the trends: view a demo and get in touch with our team today.
Planning your insurance agency perpetuation may seem like an insurmountable task. But, when broken down into manageable pieces, it can be tackled like any major project. Throughout the years, we’ve created a number of resources to help owners map out their succession plan. When compiled, we found five simple questions can put agency transition on the road to success.
Do I perpetuate internally or externally?
There’s a reason this is question number one. Your answer will determine what path you’ll take and how to prepare your agency for it. Weigh what you’re looking for in succession. Internal perpetuation usually means more brand consistency and control, but external generally means a higher cash gain.
Who will take over?
Once you know if you’re looking inside or outside of your agency, think about who will be taking the reigns. If internally, it may be a family member or employee. If external, it could be a local agency, larger regional agency, or even a bank. Decide what’s best for your business. Ideally, you should start planning your perpetuation 5-10 years out so you have time to work with your successor on the next three questions.
Determining agency value can be tricky. To help, ensure you have a financial reporting system in place early on. Most agencies use their management system to track money in and out. Use reporting features to set up recurring reports to give you a clear picture of where you stand year to year. This data will inform you on your agency’s real value. That’s a great bargaining chip when negotiating with potentials buyers.
What’s my timeline?
If you’re asking when you should start planning, the answer is now. As mentioned, the nuts and bolts of perpetuation should be put into motion 5-10 years out, but it’s never too soon to draft a timeline. In your timeline, map out when you plan to select a successor, length of the transition period, and your expected turnover month and year. Knowing these dates ahead will help you prepare your staff, your successor, and yourself for the transition.
What’s my post-succession role?
Everyone is different when it comes to how much they’d like to be involved post-transition. You can stay on with a more active role as an advisor or board member, or you can choose to take a more passive position jumping in here and there as needed. If full retirement is more up your alley, you can pass off your agency and hit the links. Just be sure you’re upfront with your successor on how you’d like to be involved.
There’s a lot that goes into planning and executing your agency transition. What are you most anxious about? Whatever it may be, that’s the area where you need to spend the most time. Reach out to owners in your local professional organizations, do your research, and make sure you’re as prepared as you can be for whatever scares you most.
Find out what other agencies had to say about perpetuation in our Perpetuation Survey
For many, it’s the transition itself that is most intimidating. You can ease that fear by ensuring you have the right technology to easily transfer information. As we’ve heard from our partner agents, being able to turn over critical data with our Partner XE agency management system has been a lifesaver. With integrated accounting and email systems and an intuitive, easy to use interface, Partner XE leaves you one less thing to worry about in agency perpetuation.
To find out more about Partner XE, get in touch with an SIS team member today at [email protected].
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