Inflation affects every aspect of our economy and insurance agents are not exempt. The rising costs of labor, parts, and building supplies, in turn, increase the costs of claims, making insurance more expensive overall. The inflation impact on insurance takes a toll on customers and agents alike.
Insurance agents have to manage inflation in the products they sell, but also when it comes to running their agencies. When it costs more to purchase supplies and hire people, agents may find every aspect of their business affected by inflation.
Read on to learn more about how inflation is affecting insurance agents and what they can do to be proactive in challenging economic times.
The Inflation Impact on Insurance Agents
Insurance agents face inflation both in the products they sell and in the services they consume to run their businesses. This double-edged sword is challenging during these times of high inflation. This may mean agents have to change their usual strategies or try new things.
Find discounts
It is especially important to take advantage of any discounts available to you as you run your business. Check out the valuable discounts you’re eligible for as a member of the American Agents Alliance when you’re shopping for business services.
Be creative
Insurance agents may look to alternative ways to do business when inflation squeezes every dollar. Try replacing your expensive marketing package with social media marketing and grassroots efforts in your local community as ways to promote yourself for little to no cost.
Network
Talk with other independent agents and brokers. Use your network to ask questions and learn new ways to save on operating costs. Others in your region or niche may have valuable ideas you can use. For some of the best networking in the industry, become a member of the American Agents Alliance.
Ways to Help Your Clients Facing Insurance Inflation
Knowing your clients may be facing premium increases for their auto and home policies, you can help them find the best rates possible.
Secure discounts
Have you shopped all the discounts possible for your policyholders? Auto insurance carriers in particular offer many discounts and your policyholders likely qualify for several. Try asking your customers if they want to enroll in their insurer’s telematics program to exchange their driving data for a potential discount. Or check to see if your customer has a child who qualifies for the good student discount or if a college-aged teen is away at school without access to a car. Your customer could save money in both cases.
Bundle policies
Make sure you have bundled your client’s auto, home, and umbrella policies to get the best rate from their carrier. If your policyholder has different carriers for their auto and home, you can talk with them about moving one of the policies to take advantage of the bundling discount. You can run the numbers to see which policy you should move so your client saves the most, then bundle them to get a lower rate.
Shop around at renewal
Auto insurance premiums rose 3-12% for some drivers this year, a hearty increase for many consumers. Finding a different insurer could help. Comparing rates and shopping your customer’s business around to different insurers at renewal time is often the best way to get the lowest rate.
Your customers who have been with their current insurance company for a while probably are not getting the lowest rate at renewal, so shop their business around to help them save money. Be sure to compare policies and talk with your policyholders about coverage options so they don’t drop their benefits to lower the price.
Talk with them about inflation
Be honest with your policyholders. Explain the inflation impact on insurance and how it is affecting the costs of insurance premiums so they are not surprised to find a higher bill at renewal. And work with your clients to help them find a better rate if they want to shop around, or just listen if they need to vent.
Inflation Expected to Continue
We will continue feeling some of the effects of inflation for a long time. And because consumers continue to need insurance, agents and brokers will need to work creatively to find the best rates and products for their customers. Join the American Agents Alliance to stay on top of trends and tips to help your customers.
