When it comes to insurance, everything seems pretty straightforward. Agencies like yours sell policies of various types to both individuals and businesses. So, that makes it appear as though the premiums paid by policyholders are your only revenue stream. Right? Well, no. There are many additional opportunities for agencies to generate revenue.
Especially today, just about all industries deal with fierce competition. That includes the insurance sector. Especially after 2020, an increasing number of people recognize how important it is to have the correct type and amount of coverage.
On the one hand, that helps boost insurance sales. On the other hand, it’s not the only option available for growing your business. If you own an independent insurance agency, here’s your chance to learn about the various revenue streams and how you can maximize them.
Commissions
For independent insurance agencies, commissions are a big part of generating revenue. However, the revenue will increase not only as you build your client base but also if you opt to work with an aggregator.
By banding together with other independent agencies, you gain more access to markets and insurance carriers. Since this allows you to provide more options, it too will help grow your client base. As a result, hit ratios will increase, which bolsters both sales and commissions. So, to maximize this particular revenue stream, consider an aggregator.
Incentives Based on Growth
Here’s another way to boost profits. It’s common for all types of companies to use incentives as a way to increase sales, including those in the insurance industry. If you create a good plan, you can use growth incentives as another revenue stream.
For this, you need to establish an incentive that’s based on new business, as well as overall book growth. Keep in mind that insurance carriers typically only offer this to agencies that meet specific criteria for profitability and size and those that secure business with them.
Profit-sharing
This is another type of incentive that insurance carriers can give out, sharing a portion of their profits with agencies that meet certain requirements. The amount you can receive depends on several factors, including the insurance carrier contract. In most instances, this involves a combination of growth and loss ratios. Just remember that you’ll likely experience some fluctuation. That means there’s no viable way to budget for this or consider it a reliable revenue stream.
Even so, along with some more challenging years, your agency will likely have some excellent ones. Overall, the revenue gained from profit-sharing should end up in your favor.
Technology
You might think this sounds like an odd revenue stream, but with the right insurance agency management software, your agency can reach more prospects. Now, these aren’t just any prospects, but those targeted specifically for the type of insurance you sell.
Amazingly, many independent insurance agencies still use outdated systems that provide little to no benefits. However, if you rely on the right software, you can accomplish several things. First, this will help your agency run more efficiently. Second, it gives you access to more potential clients. Third, it opens the door to better communication.
A great software program can automate some of your tasks, saving both time and money. It also personalizes your approach to potential clients. The broader your agency’s reach, the greater the chance of growing your business. So, don’t overlook the possibilities that come from technology.
There’s yet another advantage to using insurance software as a revenue stream. Along with making connections with prospects, you can stay in touch with the clients you already have. So, as a new product becomes available, you can quickly and seamlessly introduce them to it.
Something else to consider is that the right software will make it easier for you to network with other insurance professionals. Building solid business relationships can increase your agency’s sales. For example, if an agent within the network can’t provide the coverage their client needs but you can, they can refer the interested individual or business to your insurance agency.
Reaching Beyond Standard Sales
Yes, the traditional methods your agency uses for marketing and sales are important. However, to maximize profits, you have many other opportunities. Especially when it comes to insurance, you need to get creative. While Jenesis can’t help with everything, we can provide you with superior insurance agency management software. Help your agency streamline its processes and make more money today.