In the short run, agency operating income should increase as commissions follow the upward trend in premium increases. This will be balanced by a generally negative outlook on carrier profitability and contingent income for agencies. Agencies that don’t depend on contingent income will be generally better positioned. (Credit: Pyroll/Adobe Stock) In the short run, agency operating income should increase as commissions follow the upward trend in premium increases. This will be balanced by a generally negative outlook on carrier profitability and contingent income for agencies. Agencies that don’t depend on contingent income will be generally better positioned. (Credit: Pyroll/Adobe Stock)

As I write this in January 2023, I see three macroeconomic factors that will influence opportunities and challenges for the insurance distribution industry in 2023 and two micro factors that will shape our immediate future. The interplay of inflation, interest rates, labor challenges and the ensuing impacts on insurer costs and industry talent — combined with how agencies respond to them — will determine profitability, growth and positioning for the future.

While challenges aplenty surround us, agency owners who make a commitment to operational excellence will see their way through these choppy waters, ready to take on smoother seas in years to come.

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