Program Development: Time to Create Movement in the Industry

Recently, differing opinion articles have been published about trends in the insurance industry. They range from the “have to have” digital tech trends to general industry predictions for the next decade. Since the industry’s peak return on investment back in 2014, the landscape of impending economic slowdown, heightened regulatory uncertainty coupled with increased customer demand for personalized service is causing anxiety among us all. So what can we do to hedge our risks and continue to be a player in this industry?

Are you an industry insider who has a vision of movement away from the traditional insurance commission model? Are you or your firm ready to move in a direction of providing a higher level of advisory services?

With industry consolidation continuing and shrinking market options for consumers, one method of transforming an insurance agency is through program development. The approach to program development is two-pronged: 1) create a “specialty” program to offer to clients and other agencies and; 2) partner with different associations to leverage the services your organization offers, creating a unique, all inclusive program specifically for members.

Program development creates a platform for you to harness all of your knowledge, leverage relationships, create customized plans and elevate you and your firm to higher level of advisory services.

The first option, creating a “specialty” program, possibly not offered by any other agency and being first to market, is labor intensive and will require a significant time investment, specialized underwriting and may not have the rate of return you anticipate.

The second option, partnering with different organizations and associations, will open doors and introduce your firm to a new industry and its members, potentially opening up a new world of opportunity for you to grow your business. In addition, expanding program services to include add-on solutions will facilitate creating ongoing affinity partner relationships for the organization and present your firm as one that others want to partner with.

General rules of thumb when exploring the option of creating programs with associations or other membership-based groups as partners:

• Act as an advisor and an advocate for your clients. You are the expert! Present your clients with the most strategic and cost effective program options for their membership.

• Make sure you have the infrastructure to create a full program for your clients. Offering benefits administration and P/C insurance specifically designed for the industry is a strong program line-up that any group or association should be offered.

• Target a group or association that can be leveraged into building other programs through this relationship.

• Continue to maintain strong underwriter and carrier relationships; they can help create specialty programs.

• Create affinity partnerships with other organizations in program development. Presenting a program with add-on services such as 401(k), financial advisory services, HR, and payroll processing aids in fostering a strong, long-term solution for organizations.

• Prove your value by transitioning to a fee-based model. By removing existing commissions, clients save on their insurance purchases and allow you to provide unbiased advice and transparency to clients.

• Create programs with the vision of replication in mind. Design a platform that can be used to develop new programs quickly and efficiently with straightforward cost management and planning.

The insurance industry is going through a once-in-a-lifetime change. Challenge yourself and your people to be visionary when working with clients, continue developing your business acumen and always think about creative ways to develop robust programs for your clients.

May is CFO/director of operations at GDP Advisors LLC in McKinney, Texas. Website: www.gdpadvisors.com