The future of insurance agents in Rhode Island

Is your insurance agent getting ready to retire?

The average age of an insurance professional is 59 and one in four of those agents is expected to retire by the end of 2018. If your insurance agent is getting ready to retire, do you know what the perpetuation plan is for their agency and (more importantly) your insurance account?

What happens to your account when your agent retires?

While you shouldn’t worry about losing your insurance coverage, losing the business relationship can affect your insurance policies in some unexpected ways. While there are many benefits of choosing an independent agent, if that agent does not have a plan on how to transition their accounts after their retirement, some of those benefits can be lost.

When an agent retires, there are basically two options to transition his or her accounts: That agent either works for an agency with younger insurance professionals who will work with the retiring agent to ensure a smooth transition for their clients. Or, if that agent doesn’t have younger insurance professionals to take over for them, they will sell their book of business to a larger agency to manage.

Agency consolidation:

While the consolidation of smaller agencies (that are acquired by larger regional operations) offer some benefits due to economies of scale, they often sacrifice the business relationship which is one of the main value proposition of working with an independent agent. Many smaller clients are consolidated into “service centers” and lose the relationship all together. Many business owners, who rely on their agent’s institutional knowledge of their business, may assume that these larger agencies will provide the same advice and guidance that their old agent provided. Unfortunately, an unfortunate result of increased efficiencies is a loss of the personal service that policy holder may be accustomed to.

Agency perpetuation:

Agencies that have invested in the future of their business genuinely care about their customers. By bringing in and investing in the next generation of insurance professionals, they ensure that their valued clients aren’t left in the lurch. The next generation of agents bring a new perspective, new ideas and new technologies to their agency as well. New agents benefit for the institutional knowledge provided by your current agent while also helping to provide you with better service.

What you should look for:

If your agent brings a new protégé to you next renewal meeting you should view it as a positive sign that your agent has a perpetuation plan in place and is not just looking to cash-out when they retire. If your agent is getting older and you are seeing less and less of them, you may want to ask what their plans are after their retirement.

If your agent’s plan is to sell and move your business to a new agency (or your agent has already retired and sold your policy) contact Shove Insurance today. Founded in 1859, Shove is the oldest agency in Rhode Island and the next generation is ready to serve you for the foreseeable future.