What should you do about it?

Encourage your carriers to take aggressive rate action. Unlike Brigadoon, when everyone wakes up from their slumber at the same time, some carriers are still acting like this will all go away. It won't. The sooner they take action, the easier your life will be as you've taken action to stop your agency's negative loss ratios from deteriorating.
Cooperate with your carriers where you can in encouraging regulators to allow adequate rate actions. Government is generally slow to act or respond, and the speed with which rates are approved and put into the market will determine how long, and how painful, this period will be.
Consult with your clients. Explain to them what is happening to their costs. As most U.S. families are struggling with rising costs for basic living expenses, this news won't be welcome, but it shouldn't be surprising. You can offer solutions to weather the storm and reduce costs. You can move clients to different carriers more frequently to take advantage of what will be an increasingly volatile market, suggest higher deductibles and encourage loss mitigation strategies.
Contract with additional quality carriers. Insurance is made out of money and responds rapidly to supply and demand. You may find some of your favorite companies restrict the supply of insurance they'll provide you to sell. Just like every other business, you must get creative to have an adequate supply of insurance for your customers. Having some extra carriers at the ready could prove to be invaluable.
Re-underwrite your own books of business and remove less attractive risks if you must in order to preserve capacity. Insist on rounded books of business. Not only will this save customers money, improve your loss results and increase your commission income, it very likely will mean that piece of business is one your carrier won't refuse to renew.
Examine and evaluate your loss ratios and carrier rate actions to determine if you need to be moving business proactively to minimize profit-sharing risk or damage to your agency.
Aggressively round accounts. As mentioned above, this will improve the likelihood of maintaining carrier capacity, but it will also provide additional premium to support your loss ratios. It will also increase commission income to offset the loss of contingency income.
Consider negotiating fixed contingency deals where you can. Many larger agencies or agency networks do this routinely. This practice allows producers to spread loss risk over a period of years and reduces volatility in contingent income.
Increase your marketing and sales efforts. This is going to be a difficult period for everyone and when costs go up significantly, and continue to do so for a long time, consumers (both commercial and personal) start shopping. Some agencies won't do a good job of mitigating cost increases for their customers. Take advantage of that.

Of course, the news isn't all bad. Commission income will be increasing, which will partially offset the reduction or loss of contingent income. That good news needs to be taken with the understanding that your costs will also be increasing and you will be working harder than ever to maintain adequate supplies of insurance for your customers while managing the fundamentals of your business.

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