We are all well aware of the hard economic times our countryfaces. Unemployment is up, credit availability and auto sales aredown, and businesses are scaling back. For our industry, fewer carand home purchases translate into fewer personal lines policies.Fewer business investments translate into fewer commercial linespolicies. In this type of environment, the simple path may seem tobe to pull back, to dig in, and try to ride out the storm.

Periods of change, however, are often ideal times to re-examinehow we run our businesses and to consider making adjustments thatwill enable us to thrive in the long term. The Florida marketprovides an additional dimension to the overall national economicsituation. Carriers with captive networks are modifying theirbusiness practices — in many cases pulling out lines of business orleaving the Florida market altogether. As a result, customers arelooking to new channels for new services, even new carriers andagents.

This can be an opportunity to capture new customers. But as youseek to expand your client base, you also should examine youroperations to determine if you need to modify your technologyinfrastructure to become more competitive.

Let's look at the four key drivers for a typical agency, thethings that you focus on every day to make sure your business isstrong.

Customer retention and great customer service. In a slowingeconomy the first thing that you need to focus on is retaining goodcustomers, and providing great service is a key to doing this.

Revenue growth and a deeper understanding of customers. You needto be creative in how you look for opportunities in the currentenvironment. Growth is not easy to come by today, and you mustsearch even deeper for new avenues for business expansion.

Streamlined operations and improved business processes.Maintaining and improving operations is vital in this day and age.Reducing costs and improving delivery are two aspects of businessthat never go out of style.

Succession planning and maximizing the value of your agency.Some of you may be ready to retire, and are contemplating who isgoing to succeed you. It may be a family member; it may beconsolidation with another agency. Either way, you need to ensurethat your business is operating at peak levels to ensure maximumreturn for you and maximum value for the buyer. Even if successionis not in your near-term plan, it should be a part of yourlong-term thinking.

Examining these key business drivers is a great way to evaluateyour agency infrastructure and determine if you have all the righttools to achieve your business goals. While a good agencymanagement system is the cornerstone of a well-run agency, it isnot the complete solution to agency automation. In today'stechnological and economic environment, arming yourself with abroader set of tools allows you to maximize the potential of yourfirm.

Find Competitive Prices With Real-Time Rating System

A key element to retaining customers is ensuring that you aregetting them the most competitive rates possible. For theindependent agent, a real-time rating solution allows you to go tomultiple carriers and find the policy that best fits yourcustomer's needs. After all, a key differentiator for you as anindependent agent is the ability to go across carriers. Only a truereal-time rating solution allows you to do this. Some vendorsmasquerade their carrier transaction interface solutions asreal-time raters, but they are not. An interface that goes to asingle carrier that only provides manufactured rates is not thetool you want or need to get the best rate for your customers inthis bottom-line oriented economy.

In addition to getting the best rates for your customers, youwant to be sure that your CSRs are able to easily process policyupdates and endorsements and have the right tools to immediatelyaddress customers' needs. An on-line agency management systemenables your CSRs to access customer information from any computeron the Internet. If you have multiple offices, you can load-sharethe work. If there is a spike in the activity for one office, thenCSRs from another office can pitch in to temporarily help off-loadthe work.

In addition, supporting and servicing customers in off-hoursbecomes much easier. If one of your largest customers suffers aloss or accident over the weekend or during off-peak hours, with anon-line agency management system in place the client can contactyour agency and you or one of your staff can immediately log in andbegin the necessary processes. This can be done from your homewithout having to drive to the office. And if a natural disasterimpacts your office, then you can move to another county or evenout of the state and continue to support and service yourcustomers.

We cannot ignore the fact that the world has changed in the lastdecade. More business is being conducted on the Internet. In thisenvironment you want to make sure that you can attract customerswho prefer to use a Web site to check on and update their policies,print certificates, or manage their employee benefits, as opposedto picking up a phone or visiting an office. When electronicinteraction is done right, customers feel better about the serviceand you can reduce costs within your agency.

Expand Your Revenue Sources By Cross-Selling

A first step in growing revenue is making sure that yourproducers are properly licensed; you do not want to pay penaltyfees because of a credentialing oversight. But for multi-stateoperations, keeping current with the multitude of regulations posesa significant challenge. Done manually, it can be a very expensiveand time-consuming process. There are solutions available today,however, that directly link to state licensing authorities andenable you to conduct real-time licensing certification renewals atlimited cost to you.

Once your producers are licensed they need good tools. Yes, manymanagement systems give you a consolidated view of your customerbase and tools that allow you to cross-sell customers. But in thisday and age you want to look to new markets and new opportunities.What happens if your producers are unfamiliar with a specific lineof business or need help in writing the policy?

Subscribing to a source of content that pulls from multiplelibraries and is structured around specific topics is probably thebest way to approach this. Producers can quickly get up to speedregarding requirements and easily obtain the necessary informationto build a policy that provides the best value to customers whilelimiting risk for everyone. Even better is access to a solutionthat enables producers to write policies and develop proposals onthe spot. Having a tool that has built-in knowledge that helpsguide your producers through new lines of business is somethingthat can differentiate you from the agent down the street.

For property and casualty agencies looking to diversify theirbusiness, employee benefits are a great add-on product to sell tocommercial customers. Providing benefits products to yourcommercial accounts makes you an invaluable partner to them.

However, because the benefits' eco-system differs somewhat fromthe property and casualty eco-system, benefits management requiresa set of operations and procedures that may not be familiar to youragency employees. It requires a different set of relationships andprocesses, and much of that industry is moving to an on-lineenvironment. You can't shoehorn benefits into a generic line ofbusiness process and assume that you can run it effectively (ordrive great customer service!).

Streamline Operations and Improve Business Processes

Of course, you need a central hub of information to house yourcustomer, policy and business information, a place where you caneffectively manage your accounting and finances. The managementsystem should have a rich Web-based user interface that enablesyour staff to perform multiple actions without having to scrollthrough multiple screens.

Being able to easily access information allows you to respondquickly to customer inquiries and manage more policies with fewerresources. An optimized accounting package that is tailored to theinsurance industry and adheres to standard accounting principlessuch as double-entry accounting means that you spend less timeclosing your books at the end of the month. It also ensures thatyour finances are always accurate.

A key element to streamlining your operations is to bettermanage the paper that still forms the basis of much of ourbusinesses. A modern content and document system that goes beyond1980s era bar-coding technology allows you to support robustworkflows based either on industry best practices or tailored toyour specific needs. You can design workflows that enable you totake information in from customers, assign specific tasks tospecific people, and even process the paperwork straight through tocarriers, thus eliminating multiple steps and opportunities forerrors in the paperwork.

Maximize the Value of Your Agency

Once you've retained your customer base, grown your business,and set up effective operations, you have in effect maximized thevalue of your agency. If you are contemplating merging with orselling to another agency, you have done everything you can to makeyour agency as valuable and attractive as possible. And if you areat the point in your life where you are ready to hand off thebusiness to a family member or friend, you have set them up aseffectively as possible to continue growing the business andpositively impacting your local community.

The technology landscape for agencies has evolved significantlyover the past decade. No longer are agencies solely reliant on justtheir agency management systems to automate their processes. Awell-run agency can take advantage of numerous advances that haveoccurred in the industry; technologies exist to simplify everythingfrom licensing to producer productivity to customer service andfinancial management. Taking advantage of these advances issomething that can improve your agency's bottom line and itsoverall value. And in these economic times, both are important.

Gytis Barzdukas is vice president, product management, agencysolutions, at Vertafore in Bothell, Wa. He may be reached at425-354-6297, [email protected], www.vertafore.com.