By Frank Pennachio
As Warren Buffet said, "It's only when the tide goes out that you learn who's been swimming naked." Insurance agencies with large books of workers' compensation business have been hit especially hard since the great financial crisis of 2008. When payrolls, premiums and commissions plummeted, many agencies discovered they were swimming naked.
Let's first take a look back to the period preceding the economic meltdown. Even though the economy was strong, agencies found themselves in the midst of a protracted soft market. Insurance companies were pursuing workers' compensation market share through aggressive pricing. Most employers recognized that if they "shopped the market," they would likely reduce their premiums. It was–and still is–difficult for agencies to differentiate themselves on any basis other than price.
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