In a world where everyone is focused on “growth,” independent insurance agencies, as a whole, have done very little work to measure capacity and improve the productivity of professional services.
Human-powered operations have very real limiting factors, namely, time.
Have you ever stopped to measure an insurance transaction in terms of time? If not, you cannot determine its cost. And if you understand neither the time nor the cost, you have no real way to measure capacity.
More simply, humans can physically complete only so many transactions in a day, week, month, and year, and every one of those transactions has a cost. In fact, the single limiting factor in agency scale is the number and cost of the transactions required to succeed.
Why should your agency care about the number, type, and cost of transactions?
Because whether you know it or not, we are at an inflection point in the industry, and the economics of agency bandwidth have completely shifted. Understand the economics, and you can win. Ignore the facts, and you will lose.
The law of diminishing returns in an insurance agency states that the more transactions you assign to an account manager, CSR, or VA, the faster you reach the point where productivity declines. And this decline hurts the agency in all the ways we know but rarely correlate.
Ask an account manager to complete more transactions than humanly possible, and they have no choice but to decide which ones to prioritize and complete.
What will really good account managers do when faced with that reality?
Most will first prioritize the customer. Next, they will protect the agency. Lastly, they will protect themselves.
Do that for a day? No sweat. A year? Maybe. Do it much longer, and they burn out.
The net result? Lower retention, increased E&O exposure, and, eventually, unhappy employees.
Once this continues for a period of time, it becomes agency culture. You create a culture that requires each person to individually decide what is important and what can wait.
So how can you avoid this reality? And why is right now the first time in agency history when you can realistically solve the balance vs. burnout dilemma?
Measure transactions.
What can a human reasonably accomplish?
After watching more than 40 million transactions at b atomic, I can save you the research.
The average well-supported account manager can reasonably and professionally complete eight transactions a day, 160 a month, or 1,900 a year.
And that assumes they are well supported with role clarity and discipline, strong agency processes, and the right technology.
Take any one of those components away, and the average drops to 1,200 transactions a year, and probably all the wrong ones.
Why is now the optimal time to create balance?
For the first time in agency history, technology and intelligence can separate processing from service.
If you’ve been following this series, you know that AI and automation platforms like Service Center by b atomic allow your people to focus on expertise, value, and relationships while shifting the processing time associated with insurance requests to technology partners.
In a world of limited capacity, where burnout generates bad outcomes, you can now provide the process and technology support that gives the gift of time back to your people.
With that time, they can focus on the most valuable work while technology assistants shave 10 to 60 minutes off every service request.
That creates balance and helps prevent burnout.
Customers get the gift of better service.
Account managers get the gift of time.
And the agency gets the gift of EBITDA.
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