It might seem counterintuitive to talk about your insurance agency thriving during a pandemic and a worldwide economic downturn. But there are a lot of decisions you can make over the next few months thatwill not just keep you in business but put you in astronger position than ever.
Here’s the bad news: Your insurance agency isvery likely to see a drop in revenue over the nexttwo years, even as COVID- 19 vaccines are distributed in the coming months, as it will take a whilefor enough people to be vaccinated to achieveherd immunity and for the economy to rebound.
Payrolls are going down amid higher thanusual unemployment, which means workers'comp premiums will be down. Liability premiumsare based on sales, which are also down. Finally,some businesses are closing. Their insurance policies will be canceled or not renewed.
During the Great Recession, premiums went
from growing around 4% annually to dropping at
least 2% over two years. It then took another two
years to recover to the prerecession level of
HERE’S THE GOOD NEWS
Insurance agencies are in much more stablepositions than many businesses. Here are threereasons why:
1. People are required by law to have carinsurance and workers' compensation insurance.
2. They are required by their lenders to havehomeowners coverage and business propertycoverage.
3. They are required by contracts to carryliability coverage.
As you are making plans, one temptation maybe to begin laying off staff. But study after studyhas shown this hurts your business in thelong run.
How to Thrive in a Pandemic
THERE ARE KEY DECISIONS INSURANCE AGENCY OWNERS CAN MAKE
THAT COULD PUT THEM IN A STRONGER POSITION THAN EVER.