How Can Insurance Companies Increase Profits

If you’re starting out, breaking even, or thinking about growth and scalability, profits are always a part of your insurance agency. Profits are as much about keeping up efficiency and managing your expenses as they are about generating new and recurring revenue. 

Increasing your profits can happen with substantial changes or minor tweaks to your business and its operations. You can attack it from any of several directions, you just need to find one and stick to it. 

We’ll go over a few tools, tips, and tricks for ways to increase your profits and your business’s profitability. The obvious answer, as a salesperson, is to just sell more, but there are several nuanced methods that can help far more. 

When we’re done, you’ll have more resources, tools, and inspiration to adapt your business models and grow your profits.

Decide What Insurance Products to Sell

Increasing your profits starts with making the best choices about what insurance products you offer. Start by understanding the market, where you fit in it, and what your agency can benefit most from offering. 

Insurance companies make money from both selling and investment income. You’ve got to find a way to make yourself essential to both insurance carriers and buyers. As a salesperson, your profits are largely contingent upon commissions which are reliant on successful sales and premium payments. Therefore, you’ve got to sell to make any money at all. 

When generating your suite of insurance products (life insurance, health insurance, or property and casualty insurance to name a few), make sure there’s a demand for those products and you can develop connections with insurance carriers to sell them. 

When you’re starting out, you’ll want to focus on a few tried and true products. Start by thinking about what the most insurance products people need, how consistently they need them, and how often people need to shop for it. Once you’ve gotten a few reliable products down, then you can start branching out. 

Once you’ve established what you want to sell, create curated marketing initiatives to reach your targeted demographics. In the insurance sector, selling products people want only works if people know you’re selling.

Networking and Partnerships

We know you started your own insurance agency so you wouldn’t be reliant on anyone, but other successful insurance agents can help you. Since you escaped your captive insurance agent position, you’ve got a host of new responsibilities. 

Whether you want mentorship, networking, or profit-sharing possibilities, a great way to embark on your independence with the help of other like-minded professionals is to join a member’s organization like SIAA. 

You can save time and money by learning from others who have been in your shoes and benefiting from discounts and profit-sharing opportunities. In trying to boost your profits, you should take help wherever you can get it. 

Though the insurance landscape is always changing, membership organizations like SIAA attract new insurance agents constantly who are all facing the same problems. Raising prices, decreased offerings, and an economic tailspin are plaguing us all. See all the creative, strategic, and innovative ways other agents are handling it and contribute some of your insight, too.

Prospecting

Whether you’re knocking on doors, launching email blasts, or shouting from the rooftops, prospecting is a large part of drumming up new business. New leads, insurers’ premiums and your commissions is how you make your money. 

Though renewals are how you gain sustainable income, you’ve got to have new clients before you can renew them. The trick to prospecting is knowing your insurance products backwards and forwards, plus the demographics that need them the most. 

There are a few reliable methods of prospecting that can help generate and improve your profits: 

• Referrals

People trust other people who have had a good experience. When you’ve made a strong connection with a client, ask them to spread the word about the work you did. Word of mouth is the most powerful prospecting you can do and it’s usually someone else doing it for you. You can even incentivize your clients: discounts off your services, giftcards, or promotional products for every meeting that can be traced back to them. 

• Set Aside Time

Whether it’s for cold calls or establishing connections with local businesses, make time in your day for time you only focus on prospecting. This time is built into your schedule for you to focus on hitting the pavement, metaphorically or literally. Having this time in your day will help you build reliable scripts, establish relationships, and get a rapport down that will gradually lead to more responsiveness and engagement. 

• Create Successful Templates 

When making call scripts, emails, or social media posts, find successful templates that have worked for others in the past and can work for you. Templates can save you time by developing routines and forming habits. 

• Use Networking Opportunities

City council meetings, your kids’ school events, or conferences can all prove to be lucrative opportunities if you’re interested in pure networking opportunities for face to face interactions. These are great low-stakes interactions to practice your scripts, develop your value propositions, and reach out to people you wouldn’t ordinarily meet.

Content Marketing is Key to Nurturing Leads

Your agency’s profitability may depend on insurance claims, insurance underwriting, and how many policies you sell, but none of that means anything if you don’t have any clients. 

To attract clients, you need to use quality marketing strategies. Content marketing is key to developing and strengthening your relationships with new leads and keeping them as clients. 

Marketing efforts may seem pricey, but it’s a worthy investment in your agency’s future profits. Increasing your marketing presence is what drives clientele to purchase your products. That only happens when it’s effective content marketing, though. 

Try a few of these to see what works best for your agency:

1. Find out what sets you apart and emphasize in your marketing.
2. Stress the difference between working with an agency and going directly to the insurance company, as well as the pain points you’re trying to help. 
3. Get short, straight to the point marketing blurbs or testimonials that can reach and hold prospects’ attention.
4. Develop consistent marketing blasts on platforms you know how to utilize. Make sure your site usage is both effective and constant. 
5. When in doubt, use a marketing consultant or outsource to a marketing firm to do what you don’t have time to learn.
6. Use search engine optimization to drive leads to your website and make sure it addresses common pain points on the landing page. 

Invest in your marketing efforts to increase your profits. As an independent insurance broker, you can be agile and creative in your marketing efforts, too. You’re not limited to formulaic scripts and insurance jargon. Focus on your target demographics as people and address their pain points directly with products and services only you can offer. Plus when you throw in your competitive prices, you’ll have their attention.

Cross Sell to Upsell

You left your captive insurance job to sell… one type of insurance to one client? No you didn’t. You left to sell a variety of products to different clients. Once you have a strong relationship with a client, that’s your opportunity to grow your business and its profits by selling more products to one client. 

Strengthening your relationships with existing clients helps twofold. It increases your revenue, which drives your renewal rates, which go a long way towards increasing your profits.

Not only are prospects expensive to attract, most of them don’t work out. When you integrate cross selling and upselling into your regular client maintenance, you’re devoting already allocated time and resources into generating more revenue. 

Consider a hypothetical client, you started the underwriting process with them with the goal of getting them auto insurance. During a regular check in, you find out they’re starting a small business. 

In that chat, you’ve discovered that a client you already have may need more than a few more insurance products. In all likelihood, your agency offers them. You can offer bundling discounts, comparative shopping expertise, and valuable time-saving efforts to your client. 

All of this leads to a happier client, who is much more likely to stay on with your agency. By cross selling and upselling, you’ve opened up a profit avenue you didn’t have to use extra marketing, strategy, or sales funds for.

The most important part of both cross selling and upselling is to do it when your clients trust you or when the opportunity presents itself organically. Don’t get aggressive, overwhelming, or offer too many unnecessary products at once. 

Doing so can scare off clients who are still shopping, driving them towards more passive insurance agents who don’t have the eager energy of a used car salesman. Suggest it to clients you know need more insurance products and can use it with complementary or existing insurance coverage.

This Way to Higher Profits

Sell and sell aggressively — that’s what you always thought. As an independent insurance agent, your profits and your own take are in direct correspondence with your sales. 

Naturally, you thought to increase your profits you need to increase your sales. While that’s true, there are several approaches you can take and a lot more ways than just being a nuisance to new and existing clients. 

By upselling, cross selling, and increasing your marketing efforts, you can drive your profits higher than ever with less initiatives than you imagined. Whether it’s through these strategies or joining a membership organization like SIAA, there’s so much more to driving your profits than knocking down doors. From anticipating your profitability beyond breaking even to networking events, SIAA can help you in whatever initiatives you’re pursuing. 

Contact SIAA or join today to learn more about the benefits that can increase your agency’s profitability. Plus, download the free workbook that will help with your transition from a captive agent to a profitable independent insurance agent.