Over the past 18 months, DJ was feeling the effects of the soft market in the form of lower commissions and increased competition. He was becoming increasingly frustrated with the market conditions, and he felt like he had to make adjustments or risk market share and profitability.

Disturbing news: while sitting in his office reading an industry publication, DJ came across an article citing a recent study of consumer behavior and the Internet. Specifically, that 85% of consumers start their search for all types of insurance online.

As the 2008 election cycle winds down, independent agents across the country are trying to determine how the different outcomes will affect their agency.

While there’s room for debate on which administration will have a positive effect on the way agents are regulated, taxed, and licensed, there is ZERO room for debate on the challenges that 2009 will pose.

The following is a summary of how agents will need to adjust their strategy under the two administrations.

Obama (Democrat)
With Obama in the White House, independent agents can expect these several challenges:

"...Here’s an overview of the numbers we’ve generated since we began using the Astonish system in March. These results were generated between March 1st, 2008 and September 30th, 2008. As you know, every state is experiencing a soft market, so this growth is not exclusive to Massachusetts...

As the economy continues to shift, independent agents across the country are looking for more cost-effective ways to attract lucrative commercial clients to their agencies. The conventional wisdom surrounding this segment of the market has always been that business owners and corporate clients will make insurance-purchasing decisions based on relationships first and clever marketing second.

While relationship building will always play a major role in attracting commercial accounts, an agency in South Florida has discovered a low-cost, highly effective way to capture market share.

DJ Jakhotia has been a successful insurance agent for many years. Through relationships, referrals, and other traditional marketing sources, DJ organically grew his business. Over the past few years, Jakhotia, like many other independent agencies, has experienced a significant drop off in new business. At first, he attributed the business to “normal” economic cycles, then the pullback of many carriers from

As I travel the country speaking with agent principals, it’s clear that there are two prevailing schools of thought:

1. Due to the shifting economy, the best thing we can do is cut expenses, pull back on advertising, and consider the possibility of selling the agency or merging with a competitor.
2. There has never been a better time to capture market share, buy out competitors, and take advantage of the recent shift in the marketplace.

Predicting negative future economic conditions can become a self-fulfilling prophecy.

A better strategy is to figure out ways to insulate your agency from almost all market conditions. This takes focus and effort. It starts with an analysis of your existing profit LEAKS.

Research shows that 85% of all insurance buyers in 2009 will be influenced by the Internet. This does not mean that all consumers will apply online, however commercial and personal lines customers will go to the Internet at some point during the buying process to determine their next steps in obtaining a policy.

There is reality, and then there is the reality that you as an independent agent and business owner create. In your circle of influence - employees, clients, prospects, and investors - they are watching you to see how you react in times of change.

Here’s the problem. When you purchase leads:

• Where did your customer go to get their insurance quote?
• Where will they most likely go to get their next insurance quote?
• Will you get their next lead, or will your competition?

That’s a scary reality. The question now arises: Are there any other options?

YES. The best independent insurance agencies have discovered that leads generated from their own Virtual Insurance Offices have twice the closing ratio, higher policies per customer, and are three times as loyal to your agency.