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Gaming the Hard Market: How a Handful of Insurance Agencies are Crushing Their Competition


“You make most of your money in a bear market, you just don’t realize it at the time.”

Shelby Cullom Davis

Every industry under the sun goes through market cycles. Insurance is no different, we just have a fun name for it — Hard Market. Characterized by higher premiums, lower retention, free-falling commissions, and a whole lot of other nasty side-effects, a hard market can be difficult for agencies of all sizes to cope with.

Not everyone, though. There exist a subset of agencies that undeniably thrive but… how? Before one can truly understand ‘how’ these agencies are succeeding so massively in such a perilous market, it’s first necessary to understand the conditions of the market itself.

There are many factors that cause a hard market: increased rates of catastrophe, higher claim costs, market exodus, increased reinsurance costs, regulatory changes & more. All of which lead to rising premiums, compressed commissions, and notably, lower customer retention.

What makes this hard market a bit unique? All of these things are happening at once, which has prolonged any meaningful level of ‘recovery.’ This explains why the premiums of most lines of insurance are up, namely property insurance which, according to Marsh, just crossed its 24th consecutive quarter of price increases (as of Q3 2023.)

Which brings the discussion back to the original question — how are a few agencies, despite all of this downward force in the market, increasing net-new premium YoY, retaining customers at ~95%+, and making more commission per policy than ever before?

It all comes down to four key elements: Customer Experience, Cross-selling, Data Integrity, & Carrier Optimization.

Customer Experience

Arguably, the main reason customers choose to work with a specific agent/agency versus going direct to the carrier is due to the relationship or the ‘personal touch’ they provide.

This is true for most professional services. Many people prefer to work with a CPA versus just walking into H&R Block because that CPA knows them, their situation, lifestyle, and financial goals. Many people prefer to work with a specific banker because that banker knows them, their business, and their business plan. Because of this, the CPA can recommend niche tax strategies that could help that person save thousands on their taxes and the banker could help recommend specific loan programs to help businesses grow in the most resource-efficient way possible.

Insurance is no different, with the exception that customers need that personal touch now more than ever. In an insurance landscape characterized by skyrocketing premiums, the consumer is who has the most to lose and their agents are the bulwark positioned to allow them safe passage.

However, in this type of market, most agencies turtle. They hunker down, focusing all of their energy on retention, which is not entirely wrong. It should be done. The most proactive agencies get out ahead of uncomfortable renewal conversations with customers and come prepared with a plan. They double down on relationship building before renewal to solidify that interpersonal connection. They help their customers shop around for the best possible deal and use their industry knowledge to help them save even more. They make the entire process extremely turnkey and frictionless for their customer and are subsequently rewarded with loyalty, even at the expense of (sometimes much) higher premiums.

The smartest agencies operate a little differently, though. Instead of shifting their entire focus toward retention, they maintain some level of effort toward new business acquisition, knowing the vast majority of other agencies are completely dropping the ball on the above.

In a hard market, consumers look at all of their options. If there is no loyalty or agents sell solely on price, their book is absolutely going to be picked apart by the smart, opportunistic agency.

Let that sink in.

The catch? This is really hard to do at scale, even with a dedicated team. When agents are just starting out, it’s easy to maintain relationships with their book. However, when their book grows from 50 customers to 100, 100 to 500, and beyond, that little leaky bucket becomes an unmitigated disaster.

To solve for this, forward-thinking agencies are employing data-driven strategies to, in a personalized manner, automate their customer outreach and strengthen relationships on semi-autopilot.


This point is so simple, but so critical that it deserves its own callout. Cross-selling (or policy bundling) greatly increases customer stickiness. Research has proven the efficacy of policy bundling, with the average retention of bundled policies topping 91%, versus mono-line policies at only 67%. (APP) Considering that, at approximately 85% retention, growth stagnates and all sales efforts merely backfill lost customers, the importance of cross-selling becomes clear.

So, how? The best and brightest in the business analyze their customer and policy data to source cross-selling opportunities and then, through highly personalized automations, execute their cross-selling campaigns, boosting net-new policy revenue as well as policy retention.

There are so many creative ways to execute a data-driven cross-selling campaign. Way more that could be covered in this article. Usually, this is done with a tool like InsuredMine, Snowflake, SQL, or through an in-house data analytics team (if you need some help with this, you are welcome to book a call with me here.)

Data Integrity

While on the topic, the third key to break-neck growth in a hard market: data. Not just any ole’ data, though; good, clean, reliable data.

Nearly every agency under the sun wrestles with this. In fact, most of the agency leadership teams I work with today place a very high value on data and the insights derived from them. They track metrics meticulously, analyze data and make bold, company-defining decisions based upon those insights.

There’s just one problem: poor data integrity. Data (and the analysis of,) is very much a “garbage in, garbage out” system. Many agencies, especially mature agencies, find themselves hamstrung by legacy technology systems and their leadership teams, while well-meaning, unknowingly base many of the aforementioned company-defining decisions on partial or just flat-out bad data.

The top performers in this arena are a little different. They invest in systems that deeply integrate with each other across CRM, AMS, Raters, data platforms, and other complementary tools. By having these deep integrations, teams are incentivized to actually use the tools provided to them as they save them time, help them sell more, automate more, retain more, and ultimately, earn more.

As a byproduct, the leadership teams of these best-in-class agencies have a crystal clear picture of what is actually happening in their business, which levers they can pull to achieve growth, and the data to validate their efforts.

Carrier Optimization

The final action that sets the golden geese apart from the rest of the gaggle is how they diversify their portfolios across carriers. Notably, across the carriers that have not turned their backs on the very agents that bring customers through their door.

Look, I get it. Insurers/Reinsurers are having a hard time right now. But at the end of the day, agencies have to do what’s best for their business. If an agency conducts a majority of their business with Carrier A, but Carrier A’s rates just went ballistic, or they just slashed their commission rate in half, agencies have to reallocate.

Secondly, agencies must optimize for carrier incentives. This all comes back to data clarity and being able to forecast. Strong, reliable data grants the ability to allocate business across different carriers appropriately throughout the year to maximize the agency’s revenue potential.

Ultimately, this strategy employed properly, results in more agency resources during a downturn. Which means more fuel for the acquisition fire during such an opportunistic time.

In summary, the best agencies in the business, the ones achieving tremendous net-new growth, the highest echelons of retention, and the lust-worthy profitability are not winning because they are outworking the other 95% of agencies. In fact, they usually work less (that’s not to say they are lazy, though.)

The key to their success is putting their customers first, operationalizing their data and, through personalized automation, freeing up their precious time to acquire the unhappy customers of all the other agencies that are failing to deliver what their customers truly need in hard times.

If you made it this far, thanks for reading. I hope you found this article insightful. If this article left you wanting more or if you are looking for more step-by-step, actionable advice on how you could implement these strategies inside your own agency, you are welcome to book a free strategy session with me here.


InsureTech, Gaming the Hard Market: How a Handful of Insurance Agencies are Crushing Their Competition

Written by Josh Thomas

This article was originally published on Medium in January 2024.

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