There are many challenges faced by insurance agents and brokers in 2023. With macroeconomic issues like inflation and the talent gap continuing and industry-specific challenges with rates and capacity, independent agents and brokers need to be aware of the trending issues.
Read on to learn more about the top five challenges faced by insurance agents and brokers this year.
Five Challenges Faced By Insurance Agents and Brokers in 2023
While all professionals across industries face challenges in 2023, independent agents and brokers will need to remain focused on overcoming these issues as they navigate the year. These are our top five challenges to watch in 2023:
The talent gap continues throughout this year.
2022 brought us terms like the talent gap and the Great Resignation. These challenges are continuing in 2023, with many industries suffering from a lack of talent. Insurance is no exception. It is more difficult to find, recruit, hire, and retain talent now and every employer needs to manage this. As small businesses, independent agents and brokers may be harder hit, however. To combat this, agency owners should look holistically at their employment offerings to ensure salary, benefits, and other perks are competitive.
Challenging market conditions are likely to continue.
Another top issue insurance agents and brokers will face this year is the continued pressure of tough market conditions. With many lines facing a lack of capacity as well as higher rates, placing business is challenging. Some parts of the US, like coastal Florida or the forests of California, have seen drastic reductions in coverage availability. Homeowners struggle to find affordable insurance and these challenges affect agents and brokers. Societal issues like nuclear verdicts affect insurance rates, as well.
New technologies can cause growing pains.
The insurance industry is shifting to a more digital model in many ways. Agents and brokers need to keep up with this change, but sometimes adopting new technologies causes other, unforeseen problems. With a more digital workflow, for example, independent agents and brokers may see new cybersecurity threats. Adopting a new workflow can stress agency employees and cause errors while employees adjust to the new processes. All of these technology growing pains can cost agents time and money.
Diversity and inclusion goals continue to be important in 2023.
Insurance agents and brokers are not immune to the challenges facing larger corporations around diversity, equity, and inclusion goals. These factors are critical for agents and brokers to consider, but for a small business, they can be challenging. Independent agencies might consider outsourcing some of their DEI training and policy needs to a firm that specializes in DEI. Ignoring DEI at your agency can be a costly error, so be sure to have policies, procedures, and communication around these issues.
Regulatory changes contribute to industry volatility.
This challenge is near-constant for insurance agents and brokers. The industry is always changing due to regulatory updates, which means flexibility is key. Agents need to have systems in place to adapt quickly to changes. Agency CRM systems must be flexible and agents need to be able to trust updates are correct. When legislation changes, it is up to the agent or broker to stay on top of the update. This can be a challenge in many venues across the country, so having a way of staying on top of changes is critical.
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