Three Winners and Losers in the WDC insurance market for 2020
Updated: Dec 13, 2021
Remote Work Policy Advocates: Firms who were already retooled to work collaboratively and remotely are the Big Winners for 2020. They were not only able to seamlessly send their staff home to work, but in many cases, discovered that their staff became MORE PRODUCTIVE working from home. These firms also expanded their geographical footprint from where they recruited new staff. I placed four candidates at one WDC-based firm who were located more than two hours away from the office. In one case, the new hire lives in another state, far away. How did they do this? They embraced the latest Remote Work technology such as MS Teams and Zoom. I went back and checked my records: these four candidates were hired at a blended rate of 34% less than they would have had to pay a WDC-based candidate. Total annual savings? A combined $102,500 in salary expense among the four candidates hired – not including administrative overheads.
Larger broker/agencies: With the cost of capital near zero, large brokers/agencies are acquiring everything not nailed down in the WDC area. No need to repeat all the 2020 acquisitions. You know the players. My clients are disappearing or being consumed by other clients!
Process-driven firms: I have two specific clients who are obsessed with process. I used to think: how boring! I even placed an IT/process/data expert with one at $100k+ salary to drive new business processes through the firm. It was a game saver when COVID-19 hit in March. Everyone had the playbook. Everyone knew what to do. And then everyone went home to work. And it all worked like clockwork. Technology and Process…a beautiful thing when it works.
Small “mom & pop” insurance agencies: In case you haven’t noticed, the big boys are gobbling up the little agencies now. In three years, the WDC market will be completely dominated by less than ten firms. If you want to know who they will be, just call me. Happy to inform you.
Technology-resistant: Several of my smaller (and one large client) never invested in technology and were caught flat-footed by COVID-19. It was ugly for several months trying to retool in the midst of the chaos of a pandemic. They had little computer and internet security to their systems got hacked. Their employees were sent home to work remotely, but guess what? No Microsoft Teams or Slack. No Zoom. No collaboration. Their CRM systems were not cloud-based. It was a total disaster. Almost half their business walked out the door. One went out of business.
Producer-centric firms: Normally, one would see having a lot of producers as a big asset. Wrong. Most firms that I see that are having trouble are those who cannot service and support the clients that they do have. They make their producers responsible for their own servicing and client support because they don’t have enough CSRs or account managers. WTF! This is crazy. Producers want to SELL not service. C’mon, people. These are prime targets for recruitment. I lick my chops when I see these people.
CFs (Cheap F$%Ks): Sorry, I could not resist. I had to add this to the list – consider it a bonus. My old man worked in the produce section of a corner grocery store for his entire life. He wasn’t the most educated person, but one of his many pearls of wisdom he passed on to me was never be a CF (Cheap F$#K). Yeah, you know what this means. It means always tip the bell captain at a hotel, the shoe shine guy at the airport, the maid who cleans your hotel room, the paper boy, etc. In insurance firm operations, a CF is a manager or owner who is stingy with his carrier rebates and operating profits at the end of the year. A CF is the kind of person who gives everyone a frozen turkey as a holiday gift to employees…and then drives home in his new Mercedes SUV. A CF is a son of a bitch who could care less about his employees. A CF is someone who calls me for recruiting help and I hang up the phone.
Which one are you? A Winner or a Loser? Think about it. Make 2021 a great year!