Tony Caldwell, chairman and CEO of One Agents Alliance, tells IBA what agencies can gain from being part of an agency network, especially during crises like the COVID-19 pandemic.
IBA: How did One Agents Alliance come about, and what need does it fill in the agency space?
Tony Caldwell: I began my insurance career in 1996 in a small commercial insurance agency, and I got into the business hoping to build a large sales organization, but I didn't know how to go about doing that. In 1997, I learned about a company called Strategic Insurance Agency Alliance [SIAA], and their model solved all the problems that I was looking to solve, so we became a master agency for them in 2000.
From 2000 until 2020, we've grown into a $500 million premium organization with 185 insurance agencies and about 750 employees all told, which is a little over a 30% compound annual growth rate. SIAA and our organization are focused on growth, and with that mindset, we've evolved over the last 20 years from a market access and aggregation organization into a coaching and development organization.
IB: What benefits does OAA provide to its member agencies?
TC: The independent agency business is changing in ways that are unique in its 100-year history. Adapting to those changes and maximizing the opportunities that those changes present require people to get additional training and education, whether they're a captive agent making the transition and learning how to manage a business or they're a larger existing independent agency learning how to leverage their books of business to maximize revenue or develop digital marketing.
We currently have programs to help existing independent insurance agencies of all sizes grow their books of business and build up revenue, income and value, but we also have a long-time specialization in helping captive agents make the transition to independent agent ownership. We've done probably 250 independent agency startups over the last 20 years, and we're really proud of that. We feel like we've been a part of the growth of the independent agency system, both in terms of premium and also in terms of the numbers of employees and entrepreneurs in the system.
[We also] help agencies have broader access to the carrier marketplace because they don't have to be concerned with maintaining minimum volumes to write for a carrier. That's particularly important to existing independent agencies that are relatively small, but it's also valuable to larger agencies because it allows them to change the nature of the relationship they have with the carrier – now they're part of most carriers' largest-production organization. That means typically more money to the agencies across the board. It's also a benefit to the carriers because as a growth-focused organization, our organic growth for them is many multiples higher than the industry's growth rate, so everyone benefits.
IBA: How are OAA and its members adapting to the coronavirus outbreak?
TC: We've been helping members conduct three-, six-, nine- and 18-month analyses of their strengths, weaknesses, opportunities and threats as a baseline for their adaptation to the coronavirus. We also built a guide on how to move your agency online for our agencies at the very beginning of this crisis. We just recently published a ‘how to return to an office environment safely’ aid for them. And I collaborated with Eric Blue and Matt Masiello – two SIAA colleagues – in writing the book COVID-proof Your Agency, where we laid out the near-term future for the independent agent.
IBA: What are challenges facing insurance agencies during the pandemic?
TC: Premium reductions due to cancellations, mid-term audits and lower renewals next year are threats that agencies will face in the next three to nine months. They have more time to get ready for that than, say, a restaurant would, but they still need to get ready for it, so in our coaching sessions, we've had lots of conversations about retention – both of customers and premium – but we've also focused on new business production as an antidote to that.
Consumers, both commercial and personal, are stressed financially so saving money on an expensive item like insurance is important to them. There will be more business on the streets probably than ever in history, and being prepared to take advantage of that is something that we are focused on with our agencies.
The third thing that we're focusing on is that this is a time to increase focus on leverage with particular insurance companies. Not all carriers are reacting to the crisis in the same manner, so we're encouraging our agents to take a careful look at how they're placing business and who they're placing it with, and maximizing their benefits both to their clients and to themselves by rethinking where the business goes.