Insurance agencies need to become 'significantly more diversified'

Insurance agencies need to become 'significantly more diversified' | Insurance Business

Insurance agencies need to become

As the US population evolves and diversifies, it’s vital that insurance agencies follow suit, according to John Tiene, chief executive officer at the Agency Network Exchange (ANE) – a network of more than 70 independently-owned and operated agencies across the Mid-Atlantic states.

“At ANE, we truly believe that, going forward, the agency distribution channel needs to become significantly more diversified in terms of types of business owners and the focuses agencies have in the [different] insurance markets,” said Tiene. “Because of who we are, we already have that [diversity] within our network. We’re able to learn from it, our carriers are able to learn from it, and we’re able to share our learnings within the group.”

The growing network, which added 17 new agencies in Pennsylvania and New Jersey in 2018, celebrates diversity by bringing together agencies of all types and sizes, including a number of ethnic and culturally-focused agencies as well as some women-owned businesses.

“A shift in demographics is critically important for agents to understand because it’s a customer-based business,” Tiene pointed out. “For example, as [a huge amount of the population] is aging and moving from active workforce to semi-active workforce and retirement, their [insurance] needs change dramatically and how they buy product changes dramatically.”

At the same time, the population of the US is becoming dramatically more diverse, according to Tiene. As an example, he asked: How does an agent who might not have a large population of Spanish-speaking clients evolve in response to the reality that the segment of the US population with Spanish as a first or second language is increasing? Agents need to find ways to respond to some of these societal changes.

“We’ve got agents in our group that are already dealing with [demographic trends like] that, and they’re able to share their experiences through leader-to-leader workshops and other mechanisms we’ve put in place. [They] help other agents understand [the issues], and, interestingly, they provide support,” Tiene told Insurance Business.

“One thing we’ve noticed over the last several years is a growing collegiality between our members. Our agents lean on each other. They’ll either meet an agent at one of our events and call back for advice, or they’ll call us and ask if anyone in the group has dealt with a particular problem, and we’ll be able to connect them. We’ve created this collegial group of very competitive people who feel that […] they can trust others who, in another environment, they might consider as competitors.”

As the US population demographic changes, so too does the make-up of the agency distribution channel. Market consolidation is rife, meaning smaller independent agencies are being snapped up by larger firms and private equity players. Tiene has also noticed a trend of new agencies being set up with younger owners using their fresh skillsets to start agencies from scratch.

“These folks are in their 30s and we’re watching them […] and their utilization of digital, and we’re really excited,” he told Insurance Business. “We think there’s a true evolution going on within the distribution channel, and it’s going to be interesting.”