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While agency management has changed remarkably in the last 80 years, the underlying goal to increase sales has remained consistent and is still the ultimate driver in most agencies. The major difference today is most agencies are much more complex. They have more moving parts that must work in unison to increase sales. And because today's agencies are more complicated, making those sales profitable is more difficult. To grow and to make sales profitable requires more proactive management than ever before.

A key reason more proactive management is required is because technology has enabled agencies to grow bigger. Eighty years ago, automation consisted of a telephone and typewriter, agency commissions were much higher than they are today, and agents had more responsibility, "for better or for worse." Direct bill business did not exist, and agents were responsible for collecting premiums, which they often did door-to-door. Some policies were even payable to the agency weekly. Picture this: Every week, families expected their insurance agents to drop by and collect that week's premiums. Some customers would even have coffee or sweets ready for the visits. Travelers developed the first electronic company/agency interactive computer system in 1980. Before the advent of this technology, agents had to write binders on all policies because weeks would pass between the time when the company would get the application and make a decision. Agents also had extensive claims-paying authority because the company and its adjusters were too far away. Even a large auto underwriter like Allstate did not have a full-time auto adjuster until 1939. Decades ago, the geographical area an agency could cover was limited and carriers appointed many more agencies to ensure they had someone on the ground in all places. The barriers to entry were small because no one needed an IT system and company contracts were easier to obtain. With technological limitations and agencies on every corner, agencies remained smaller. Advances in technology have enabled agencies to grow in size simply because agency IT systems can track thousands of policies. The connection between agency management and IT today is indelible. In fact, if you Web search "agency management," most of the first 30 hits involve agency management software. As in so many other aspects of our lives today, technology has had a profound impact on agencies and agency management. A small agency of the past did not require as much hands-on management as today's larger agencies. The agency owner was almost always the key producer and manager. As long as he managed his own efforts well, the agency would likely thrive. Successful selling meant literally picking up the phone and knocking on doors. The agent (usually a man back then) who had the ability to knock on doors and ask for the sale had an opportunity to become a success. To a large degree, that really was all that was required. Sales management as we know it today was not really necessary and sales success was dependent on raw talent and very hard work. The industry was ruthless to producers who could not pull their weight. Conversely, many agencies today employ producers that cannot really sell, at least not without significant training and guidance. The world today is a lot more lenient toward these producers. Evolving from a philosophy of "only the strong survive" to expending hundreds of thousands of dollars on developing each new producer has been a seismic shift in management philosophy. Another change is that in days of old, although not all sales would be profitable, most would be. Commission rates were sometimes as much as double today's rates–especially in personal lines–and coupled with lots of float (because direct bill business was minimal), agencies could make a fair return on the premiums they were holding in trust. In today's agency, float income is negligible, commission rates are much less and expenses are higher because to increase sales, agencies must spend much more money on developing producers, value-added services and IT systems. While agents made more in commissions from carriers, they also worked harder on services carriers perform today that we often take for granted. With the minimal technology of the past, agents were the primary underwriter. Because package policies like BOPs did not exist, agents had to manually combine separate forms to create the full policy. For example, an agent would combine a fire policy with a liability policy to create a homeowners policy. The agent really was an extension of the company. Carriers had no way of writing business, much less making money, without the agency.