Insurance Agency Succession Planning Ensuring Long-Term Sustainability by pexels-fauxels-3184298

Have you thought about who might take over your insurance agency when you decide to retire? Or maybe you want to start another business venture but don’t want to close your agency.

If you’re starting to think in this direction, it’s time to implement succession planning. Succession planning, in its simplest form, means preparing to pass a leadership role to another person. By doing this in your agency, you won’t only prolong the sustainability of your business, but you will also secure your legacy.

What is Succession Planning All About?

Planning who will take over from you and determining the group of employees who will support this person is similar to drafting a playbook to ensure a stable future for your agency. Succession planning is a refined strategy ensuring a hiccup-free transition of leadership.

You’ve built your agency from the ground up. You saw the first client that signed up, you built relationships, struggled through hard times, but hit your goals year after year. The last thing you want to do is rush the handover process. When the time comes for you to explore new ventures, you should explore different avenues of succession planning and settle on the strategy that will best take your business forward.

Why Bother With Succession Planning?

At this point, you may wonder, can’t I leave it all to my family? You could, but have they shown any interest in running an insurance agency? If your son or daughter is majoring in Biology or Political Science, chances are they won’t want to run your agency for you. Should they want to take over from you, great. If not, you need to choose a person that will keep the trajectory of your agency going when you’re gone.

And you’re not just doing it for yourself. Your employees, business partners, and clients will likely sigh in relief knowing there’s a plan for the future.

It is essential, however, to start succession planning sooner rather than later. You should be training and teaching a manager or two long before you head off into the sunset on that well-deserved retirement.

Also, if you announce that you’re looking for a successor, your employee retention rate might improve dramatically. Employees who see growth opportunities will likely stick around for the long haul. This, in turn, bodes well for your clients because they don’t have to get used to a new face every couple of months.

If you decide to sell the agency but don’t want to leave the new leadership up to the new owner, your succession plan can attract quality investors and buyers.

How Does Succession Planning Work?

If you’re planning to keep your agency but appoint a new leader, you should be looking for rising stars among your employees. You can find this person in your sales team or choose one of your department heads. Sometimes, new employees show remarkable skill and promise, which means you should keep them in mind too.

The most important thing to remember is not to limit your choices to what seems safe and traditional. Diversity in leadership often leads to fresh perspectives and innovative ideas.

When you’ve narrowed your choices, you should invest in their growth for the benefit of your business and their careers. Provide them with the tools they need to succeed in the role you’ve earmarked them for. Ensure they have sufficient training, mentorship, and opportunities to gradually take on more responsibilities.

You could even merge with another agency to combine strengths and skills. Just be sure that whichever way you choose aligns with the vision and goal you have for your agency.

After settling on what you want to do, communicate your intentions with those who have a stake in your agency, including employees and family members, where applicable. The saying, two heads are better than one, couldn’t be truer here, especially because a combined effort to lead the agency to greater success will help everyone involved navigate unexpected curveballs.

That said, remember that a succession plan can never be carved in stone. You should review and reevaluate your plan as your agency evolves and circumstances change.

Succession Planning In the Insurance Industry

Keep the following factors in mind when laying out your succession plan:

  • Technology: Whoever takes over from you must be willing and able to use existing technology and adapt to new digital strategies to keep the agency relevant and competitive.
  • New generations: Up-and-coming generations like Gen Z work and think differently. Your plan should be to consider their preferences to attract and retain the best talent.
  • Diversity and inclusion: Sadly, the insurance industry is notoriously lacking in the diversity and inclusion department, but your agency can be part of the change. Create a stronger, more vibrant business culture by including diversity and inclusion initiatives in your succession plan.

Consider the Future of Your Agency

You shouldn’t look at succession planning as just another box-ticking exercise. Instead, use the opportunity to ensure your agency’s long-term success whether you’ll be enjoying it from afar or not.