IBA: How does Renaissance Alliance stand out in the network space?
Kevin Callahan: Renaissance is quite unique in its approach to the network marketplace. Naturally, we provide access for our insurance agency members to more markets and higher levels of compensation, but our true value proposition is about helping our membership get access to more premium and higher levels of profitability, and put them in a position to maintain their independence.
The way Renaissance does this is by offering significant levels of capabilities, services and technology in order to help agents with a very strong value proposition that they have offered for years to their insurance organization clients, and also to help them with the challenges they face in trying to serve their customers.
IBA: How has COVID-19 impacted agency growth so far?
KC: When the coronavirus struck, we did a lot of work on a historic basis, looking at things like the 2008 financial crisis, the World Trade Center event back in 2001 and other significant shocks to the US economic system, and we aligned ourselves with a number of economists to try to understand what sort of environment might exist in the coming two years. We projected that growth in the New England marketplace and for our agency members would drop by about 5% this year and a little over 5% next year.
As we look at where things are today, our agents have performed a bit better than that. We see their growth as having been reduced by about 2%, not 5% as anticipated. Having said that, we still have time before this environment is fully stabilized.
IBA: What are the key challenges independent agencies are facing as a result of the coronavirus?
KC: From our perspective, their challenges fall into three buckets. The first bucket is around working remotely. Most independent agencies had not prepared themselves to work remotely. These are organizations that have small offices, and employees have largely come into those offices – and to some extent, there still are customers who come into those offices. When the need to work remotely came around, dealing with that presented significant challenges for most independent agents.
The second big issue was around customer service. Most independent agencies were able to deal with customer service in a remote fashion, but what they found is that not all of their carriers were set up to efficiently deal with customer service from a remote environment.
The last bucket is around selling, and it's safe to say that very few independent agents were in a position to understand how to proactively sell remotely. Most producers in the independent agency business are folks who like to work face-to-face with their customers, and oftentimes the customers like to work face-to-face with them as well.
IBA: What strategies can agencies implement that will help them adapt and succeed in this new environment?
KC: We're beginning to see the difference in those who have embraced the challenge, worked extremely hard to recognize the new environment and taken the view that this environment might exist for a long time. And by the way, it might turn out that there are bits of the new environment that employees, insurance carriers and customers even like, [in terms of] the way that customers can be serviced and carriers can be accessed in a much more efficient way.
One of the things we did for our members is we offered a capability to bring any technology that was necessary to those agents in their remote locations. In addition, we had seminars and meetings on what software would help agency owners manage remotely and what software would help the employees of agencies work together and collaborate, even if they weren't in the same office.
It’s really all about a disciplined approach to sticking to the value proposition: What is it that our agency can do for you that other agencies cannot? Insureds are often struggling to manage their businesses and want better ‘deals’ associated with anything they have to spend money on, including insurance. But more importantly, the risk environment that we're operating in is one that very few insureds understand, and the need for advice is very high.
Those organizations that have been able to offer a value proposition, which is something more than price – that is focused on advice, trusted mentoring, helping people ensure that they have the correct coverages for the environment – those organizations we see succeeding. There are organizations that are out there growing at significant levels – higher than they were growing at a year ago – because of the way they've embraced the environment.