Independent agents are getting hit with a double whammy these days–still suffering from commission losses as a result of the persistently soft market, while simultaneously dealing with the fallout of a severe recession that is cutting account spending on insurance and driving some clients out of business. How does an agency expect to survive in such a challenging climate, let alone grow?
Expectations for a hard market turnaround do not appear to be materializing anytime soon given the drop in demand for coverage. And while some early signs of economic improvement have been cited, a quick end to the recession is not in sight.
Indeed, many agencies will struggle over the next 24 months as the economy slowly recovers, because the long-term effects of unemployment will begin to have a more sustained impact on insurable exposures beginning next year, warned Patrick Linnert, executive vice president for Marsh Berry & Company Inc., the Willoughby, Ohio-based consulting firm.
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