Chris Burand – President of Burand & Associates


Chris Burand – President of Burand & Associates on the Connected Insurance Podcast presented by Agency Revolution

Insurance futurist declares ‘Fork in the road ahead’ – which direction is your agency headed?

Chris Burand—one of the industry’s most respected thought leaders, analysts, valuation and acquisition specialists—has seen enough of the future to give agents a clear-eyed heads-up. Chris has led more than 350 seminars and workshops. He’s been published over 400 times. He writes a monthly column for the Insurance Journal, and you’ve probably seen him in Rough Notes, National Underwriter, AM Best… and many, many more publications.

In this podcast interview with Michael, Chris shares insights that could change your agency forever:

    • As carriers cut costs (AKA ‘commissions’) and build alternate distribution models, Chris paints a path to success for the modern agent.

 

    • Will you be a ‘Professional’… or a ‘peddler’? (Find out what today’s consumer really wants – and which ones will reward you most richly).

 

  • A safer world. New technologies. Faster pace of change. Emerging competitors. Chris outlines the actions today’s agency principals should take to be successful in today’s insurance landscape.

Please don’t miss this conversation with one of the insurance industry’s most respected observers and advocates! You’ll be thinking differently about your agency within the first 15 minutes!

What are other agents & brokers doing to thrive? What are the biggest trends affecting the retail insurance agent & broker? What are the most important strategies and tactics you need to grow faster? Find out here in the Connected Insurance Podcast, where Michael Jans discusses the biggest issues affecting the independent insurance agent and broker with the industry’s leading figures.


One More Thing! What do you think? How will you and your peers use this to grow your agency or brokerage? Share your thoughts in the comment section below, subscribe to get updates delivered to you and *please share this if you found it informative.

Transcript

Michael: Chris Burand, thanks so much for joining us. How are you?

Chris Burand: Very well Michael. Thank you for having me.

Michael: Well, I’m excited about it, and because I know some of the things that I want to pick your brain on, I’m excited about this conversation. First for perhaps a few listeners who don’t know who you are, if you can give us a little thumbnail on Chris Burand.

Chris: I’ve been in the insurance industry now for most of my life going on 32 years and I’ve been doing consulting for insurance agencies and carriers for the better part of that for about 25 years now.

Michael: Hey, interestingly full disclosure this is not our first interview. Some time between 20 and 25 years ago, I interviewed you for what was then the tape of the month club for insurance agents.

Chris: Was that Jack Burk’s?

Michael: No, this was mine. Jack had his and George had his and Michael had his. It’s been a while since people have been asking for that, though. Where is that cassette tape interview you did with Chris?

[laughter]

Michael: Then we did move on to CD of the month and now here we are every week along five guests. The focus of your consulting, your advisory practice is mostly once again–

Chris: Most of our work is in the form of- on a tactical level agency evaluation and E&O work. We do a lot of work with regards to carrier relationship management. Then, as you’ll see probably based on the questions you ask me, the last three or four years has really taken off for speaking to the future. Someone called me a futurist the other day, I thought that that was interesting relative to the insurance industry. I’ve been doing a lot, a lot of presentations around the United States on that subject.

Michael: Okay, well that’s a great jumping off point because largely, we talk a lot about the future here because we think it’s really interesting in the insurance industry and you clearly have some perspective there. I have questions, I have a pocketful of questions that I’m going to throw at you, but let’s talk a little bit about this future. Do you want to talk about one year, three years, five years? Where do you want to start?

Chris: We will start looking at give or take five years out.

Michael: Clearly, you perceive that there might be some distinctions, some differences between the future that we’re living in and the world that we’re living in right now as retail insurance agents, what do you think is going on?

Chris: Your timing is pretty good because right now, today, I am writing my annual white paper on the state of the insurance industry and it’s a pretty extensive report, every year, it’s very detailed.

Michael: Let me just pause you for a moment. If people want to get it, how do they get it and when can they get it?

Chris: It will probably be available towards the end of March and they can get it off my website www.burand-associates.com.

Michael: Okay, got it. We will definitely circle back to how people can contact you at the end of our conversation. Can you give us a sneak preview of some of your insights about the future of the insurance industry or the state of the insurance industry?

Chris: Sure. The trends I’ve already developed and it’s going to be hard to see that those trends are ever reversed and I think one of the most telling trends is how safe the insured world has become. That’s something that I find most people don’t realize that we watch TV news and we think that things are getting worse and more dangerous and all of that, but one of the pieces of data I track is how many claims are reported? Just how many claims do people have every year?

The number of claims that are incurred annually have been decreasing on an absolute basis for 10 years that if you add in for GDP, increases in population, increases in vehicles, increases in exposures, the number of claims being filed has decreased materially in the last 10 years. People [crosstalk]

Michael: How do you measure that? Materially, give me a number.

Chris: Well, in say, 2005 there were 54 million claims.

Michael: Okay.

Chris: In 2016, there were 48 million claims.

Michael: Got it. Now, the next obvious question is severity. Has the number of claims go down or has gone down? Has the cost of some of those claims, are they the same or higher? Because there seem to me there are a lot of arguments for some of them being higher.

Chris: Some are higher but severity has to go up when frequency goes down. It’s just a natural balance to some degree, but overall losses just aren’t really keeping up the way that they used to keep up. The insurance industry for a variety of reasons good, bad and different. Our premiums are growing faster than the economy is growing over the last 15, 20 years. One reason for that is that the actuaries didn’t expect that the world would become so much safer so quickly and so they made an honest mistake of overcharging. That’s one of the reasons for this [crosstalk]

Michael: Overall, what has been the impact of that on the profitability of the industry?

Chris: The industry has become so much more profitable in the last 10, 15 years than ever before by far than now.

Michael: Now, as the industry has become profitable, how much of that has translated to the retail sector?

Chris: It’s not translating [crosstalk]

Michael: [laughs] Because I know that before this conversation, I’m going to circle back to something you said in a previous conversation with me which is that we can also anticipate the commissions are going to go down.

Chris: Yes.

Michael: Tie all that together. Claims are going down and losses are going down and profits are going up. Gosh, on the distribution side, you’re saying commissions are going to go down and profitability is not going up so tie all this together, help us understand. It’s a serious issue, so tell us–

Chris: It’s a very serious issue–

Michael: Tell us what you think is happening here.

Chris: Right. One of the reasons commissions are going to go down is because the carriers just studied us. Price, Waterhouse, Deloitte, all of these different big consulting firms have studied it. Their conclusions are all pretty much the same because the world is becoming a safer place, because there is the sharing economy is developing that the exposures are going to decrease dramatically within the next five years.

The center study suggests that the premiums at the carrier level will decrease by 20% which is roughly $100 billion and [crosstalk] phenomenal amount of money. Now some of that’s going to be made up, how much? We don’t know, no one really knows.

Michael: Made up by what do you think? What did they miss?

Chris: They will be made up maybe by more sales a cyber, maybe there will be some, what they call, leakage capture, that will help some. There is going to be a lot of loss based on all of these different studies. The carriers are looking at it and they’re thinking two things and pretty much two things only. Number one is how do we cut expenses ahead of this loss of premium? Number two, how do we find distributors not just agents, but distributors that know how to generate organic growth?

Michael: Item number one, cut expenses. I guess I’m looking for your professional opinion on this. Clearly, one response is well, we have to cut commissions. Let’s cut costs at the distribution, part of that value chain. Do you think that’s well conceived or do you think that’s an error?

Chris: It’s pretty well conceived because they’re going to use technology to replace agencies in two critical areas. Technology is pretty close to there on a widespread basis, it’s already there in very narrow areas. Number one, carriers are not going to need agents to complete applications. It’s going to be done by technology and therefore, they do not–

Michael: When do you feel comfortable about that?

 Chris: Well, the technology is already there. You’re already seeing it, it’s already being used. Chubb made the announcement not too much ago that, let’s see, I’ll read it to you, their announcement to some extent or another, in summary, said that they will be using one question, and one question only for their applications, they’ll be online. That’s it.

Michael: [chuckles] I have to ask, can you explain the technology that makes that possible? [crosstalk]

Chris: Sure, it’s the data scraping technology.

Michael: It’s what?

Chris: Data scraping. Once you have the key piece of information and permission, someone goes out and does a data scrape of the pertinent information that prevails and it’s tied into your predictive modeling. The evidence is pretty strong. I had to argue that they can underwrite more effectively with data scraping than [crosstalk]

Michael: Than they can with the answers that are provided by the consumer?

Chris: Than the answers provided by the consumer or the agent.

Michael: Or the agent.

Chris: Yes.

Michael: Okay, wow. That’s pretty remarkable. You said they’re two things, what’s the other reason they–

Chris: The other one goes hand in hand so that’s on the commission side. On the profit sharing side is where the other cut will probably occur because upfront underwriting already works well enough to many lines, many segments that they don’t need agents upfront underwriting. Now, the companies haven’t come out and said it so explicitly. If you think about it this way, the company is paying an underwriter to underwrite, companies paying a predictive modeling software company to upfront underwrite and right now, they’re paying an agency to upfront underwrite, who in their right mind pays three entities to do one job?

We also know that upfront underwriting the way that the predictive models have been built can create a more exact pricing model that affects growth and profits and underwriting, all simultaneously. That’s really an issue that I believe that the National Association of Insurance Commissioners are studying in depth because there’s an aspect of that that may be a societal issue because of the power of the predictive modeling software. There’s a question as to how far does the NAIC actually allow this whole aspect to go? They can get really, really precise in some of their pricing with these models.

The question really goes a little bit further to the really the heart of the industry as a whole. The predictive model modeling now includes non-actuarial data points. Historically, we’ve always been an industry of large numbers, big numbers which means it’s all been actuarially based pricing. It’s no longer is a 100% actuarially based pricing. [crosstalk]

Michael: What is non-actuarial based pricing?

Chris: It’s an elasticity-based pricing, so how much will the market pay without regards to what the actuaries state is required. That’s why you see higher or lower prices for new business, and jacked up rates at renewal because we need to have a suck in price for new, jack it up at renewal, hoping they’ll sticks. Some of that will leave, but if the overall gain is high enough, then it’s worth it. It’s already not actuarially-based, not purely. You already know that.

Michael: We’re talking about this future that is safer, that has clearly some pressures at the carrier level and they’ll be, as you predicted, potentially, a fairly significant loss in premium hence, we’ve got a future with some reduced commissions but you’re also seeing reduced work, right?

Chris: Yes, there’s reduced work involved.

Michael: From that, what do you think is the strategic implication for the agency principal who’s trying to figure out how to thrive in the future?

Chris: Well, we’ve got to embrace technology instead of pushing back on technology. There’s some neat technology that’s coming out hopefully, within the next 12 months, maybe 24, that will significantly reduce agency workloads to offset some of the commission cuts, profit sharing cuts.

Michael: Can you talk a little bit about what you see there, what kind of technologies can help do that?

Chris: I’m really limited as to what I can exactly say but I’m going to–

Michael: I get that based on– I understand that. [chuckles]

Chris: I want to say that on the processing side, technology is being developed very quickly to eliminate a lot of the processing and to improve the quality of the processing, but it eliminates the human in the process in many cases. Now, the catch to that, Michael, is that in seeing how some agency owners react and a lot of personnel and agencies react, they’ve said, “Well, if you eliminate all of”, what I would call personally, on just my personal value system, “the drudgery part of processing.” The reaction has been, “Well, that’s what I do. I don’t know what to do if I’m not doing all that drudge work [crosstalk]”

Michael: Who says that? Who responds it?

Chris: That’s for the agency owners say that, producers say that, [crosstalk] say that [crosstalk]

Michael: That’s what we’re all about is processing drudge.

Chris: That’s their identity.

Michael: What’s the response there? How are you respond to some–

Chris: “I’m sorry, [crosstalk] the technology is going to take it over.”

Michael: That’s the direction that the world is moving. It’s a series of good news, bad news. On one hand, bad news, commissions are being reduced. On the other hand, good news, there’s some less work associated with it but bad news, nobody wants to be smaller. Good news, we’ll be able to embrace technologies that’ll make it easier, but still, if, in fact, there is such a significant reduction in premium, a $100 billion dollars, then as an– There’s a shrinkage in the industry. The agency principal who’s committed to organic growth wants to continue to ideally scale their agency. One of your pieces of advice is to embrace technology, what else do you think they need to do?

Chris: Embrace that technology. If necessary, you may end up having to lay off some people but reinvest the difference because the technology is going to cost less than the people. Reinvest the difference in high-quality organic growth whether that’s a marketing program or that’s it with high-quality producers. That takes me to the next point and that is that–

Michael: By the way, [chuckles] I want to hear your next point but I don’t want to skip over that one. That’s really important. Invest in growth. Let me ask you a question, I promise I’ll swing back to your point. Given that, let’s say that some agencies really do step up. Now, let’s say, whenever, three from now, five years from now, they’re running a more efficient operation, the technology is more efficient, and they want to grow so they invest in marketing so they get more clients in the door, and they probably invest sufficiently to help keep those clients in the family.

Do you think then that means that there is further consolidation at the agency level? In other words, the good will rise to the top and there’ll be some thinning of the herd?

Chris: Gosh, that’s a great question. It’s a weird deal. On paper, there should have been a massive amount of consolidation already with all the acquisitions or what have you, but based on the big I’s numbers, the number of agencies that exist is holding relatively stable. We know that we have a whole lot thousands of new agencies being created [crosstalk]

Michael: Their mechanism. I’ve had guests on this show who have shared some of the mechanisms that they’re responsible for generating these start-up agencies, these switches from the direct or captive channel to our channel. We do seem to be holding pretty steady in terms of the number of agencies. I don’t believe that we’re holding steady in terms of the distribution of premium written among agencies. The larger agencies are getting larger and we have a–

Chris: The larger agencies are getting larger almost exclusively because of acquisitions. [crosstalk]

Michael: They’re not enough good marketers?

Chris: Right. [crosstalk]

Michael: There’s not enough organic growth.

Chris: Right. They’re budgeting, by and large, especially if you take out health care premium increases. A lot of them budget for 0% organic growth.

Michael: Is your sense that the really the thriving agent in the future, they’re running a very efficient job and they have some strategic commitment to organic growth?

Chris: They have to have a strategic commitment organic growth and they’re going to have some extra dollars I would think to invest there. They’re going to be the ones that everybody wants because there’s one [crosstalk] that can really fill that gap.

Michael: They’re the ones that carriers want.

Chris: They’re the ones that carriers want. They’re going to be the ones that acquirers [crosstalk]

Michael: Acquirers want.

Chris: They could be the one everyone wants.

Michael: You do valuation, right?

Chris: Yes.

Michael: The difference between an agency that whatever, let’s say, the $3 million agency that’s flat and the $3 million agency that has a consistent record for, let’s say, the last four or five years of whatever. A nice 15% or 20% organic growth rate, the difference in valuation is significant, right?

Chris: Absolutely, yes.

Michael: Now, you had indicated that at least for a period, agencies if they do achieve some efficiencies through technology, they might have some additional dollars that they can invest in their growth. At some point, I think you’re anticipating further pressure on commissions.

 Chris: Right. There will be for a lot of reasons that as for variety of reasons, a company’s going to continue to push. We’re going to see a shift in the modeling of what an agency actually is. We’re getting there already. There’s another factor that’s coming in, that’s pushing the same exact direction, but it’s coming out from another angle and that’s E&O.

Michael: Talk about that.

Chris: On the E&O side, we’ve always had a varying degree. It’s always been a sliding scale based on statutory law and case law relative to the standard of care, to which an independent agent is held. A lot of independent agents are taught don’t know that independent agencies in most locations are held to a different standard of care than carriers or captive agents. Generally, they’re held to a higher standards of care. Now most of the time, most of the places for good reasons or for bad, the traditional independent agency has been in a middle ground. They like to show that they’re really, really good but maybe they treat certain clients better than other clients.

Maybe they’re not quite as consistent in their processes and adherence to standards of care. It’s worked out pretty decently well. If you look at the big picture of any one of these things ever been sued for this that it is scary as all get out and one of the worst things to ever happen. Because of changes in technology, again, the same exact technologies, in fact, that it’s going to increase efficiencies in well-run agencies. It’s also increasing efficiencies for plaintiff attorneys ability to do discovery on independent insurance agents for E&O claims. They’re going to be able to the technology already exists. I’ve already seen it demoed.

They can go into an independent insurance agency with this technology. They can go through tens of thousands of documents in emails and files at a cost savings to them estimated to be as much as 75% less than it was historically. They’re going to be able to find very specific files very quickly that don’t need the required standard of care. Whereas, before the attorneys didn’t want to take on the cases because it was too expensive [crosstalk]

Michael: Too much work, too much manual labor, too much risk.

Chris: Way too much manual labor.

Michael: Goodness.

Chris: I’ve been an expert witness. I’ve been called in to do the discovery to like, a warehouse full of paper. That takes weeks to get through and a ton of money to be able to put this into a scanner and have it all taken care of immediately or just attach onto the server and do it. The standard of care and adherence to the standard of care is going to be a lot greater. That’s going to divide agencies into true professionals and peddlers. People that really don’t provide an advice just make a sale go on. Don’t really do much for the quiet other than look at markets and price. That coincides with the change in their cost model as far as the carriers are going.

They’re going to cut commissions and they’re still going to need the people that just peddle insurance at whatever the price is, a shop price to shop price. It’s going to be a very different model than those agents that are true professionals. Agencies are truly professionals giving high quality advice to clients. I feel very strongly that they are going to go to a fee model instead of a commission model [crosstalk] high quality advice they’re going to be providing.

Michael: I would just want to step back on that for a second. Number one, E&O, the first insurance I ever sold, based on what you said, it would seem that E&O premiums are going to spike?

 Chris: Very likely.

Michael: We can see cost go up on E&O. Then the second thing that comes to mind is it would seem that that second group of agencies that you described as the peddlers, the price sellers that if, in fact, that technology has the capabilities that you just described that there are some considerable risk?

Chris: They are. They really are. That’s where the carriers have invested heavily hundreds of millions of dollars in new independent insurance agencies, hundreds of these agencies. These agencies are all part of that is Suretech World, but they are agencies owned by carriers. The carriers are looking at them to say, “Look, this is a price shopping model if people want to buy insurance over the internet.” By either owning the insurance agency or because of that new insurance agencies model, our acquisition cost of clients is going to be materially less than it is for a traditional brick-and-mortar insurance agency that is always selling price.

One of the reasons is, obviously, just cost-structure but another reason is that agencies that just sell price are pretty expensive models to carriers because the hit ratio for new sales is too poor. [crosstalk]

Michael: The retention sucks.

Chris: The retention sucks. [crosstalk]

Michael: This can affect carriers and agencies. It certainly affect agencies. The policy per customer count is often reduced. My argument has for some time been that between the two models, the price seller, the peddler and the True Pro that strategically choosing the latter. Being the True Pro is that’s the organic growth model that I would choose. I want to give you an opportunity to share a different perspective on that. What do you think?

Chris: The professional true counselor can’t be replaced yet.

 Michael: One, it’s a safer harbor. Two, again, in my experience and my own practice, that’s generally where I’m seeing the true scaling going on where there is some genuine depth of relationship or intimacy between the agency and their customer. They benefit from increased retention, increased referrals, more policies per customer and so on and so forth. They get a higher customer lifetime value.

Chris: Absolutely. The other modules are not going to go away anytime soon.

Michael: Is there a reason for an agency principal now listening to this to choose the peddler model versus the pro model?

 Chris: Sure, it’s a lot easier.

Michael: [laughs] Okay, all right. Easy as it may not always be the best strategic decision, but it’s that often how decisions are made.

Chris: Right. It’s a lot easier and with the advent of all these networks developing aggregators and questers and all that, it also makes their survivability a little bit better. You can be that peddler, but within a larger group and you get a hide out there. For the time being, at least, you’re also likely to get some benefits from it. That model is still plenty viable. Whether it can last, it won’t last unless the networks can get their acquisition cost of new clients to decrease significantly. We’re talking probably at least a 25% decrease in new client acquisition through carriers. [crosstalk]

Michael: Let me ask you another question. There is a channel that specializes in exactly what you talked about. The mass marketers, the direct marketers, advertise and market on price. They have a churn rate that would be completely unacceptable to the independent agency system. They attract a customer that seems to suit that channel quite well. Do you think that that demographic is attractive to the independent agency channel as those who truly want, not just the best price, but they actually want the best protection or they want the optimal protection for their assets?

[crosstalk] In other words, if we’re going head to head, channel to channel, the independent agency channel against the direct channel, if it’s price peddling, who wins?

Chris: If it’s pure price peddling, the other channel wins.

Michael: Got it. It’s a cheaper channel.

Chris: Way cheaper channel.

Michael: Got it.

Chris: The question is that independent agents in many part ways have gotten away with the thought process, the advertising that they’re bringing more value than just a price to the table when the reality is they haven’t always done that very well.

Michael: The broken promise.

Chris: Very much so.

Michael: I’m happy to talk about that one, but I’m here to ask you questions, not the other way around. I agree that, in fact, yes, if the promise of this channel is that you have me, you have an agent, you have a relationship in many, many ways. We’ve fallen short on the delivery that promise. [crosstalk] That said again, I would say, embrace technology.

Chris: Embrace technology and this is for the E&Os going to come in again is because it’s going to this new technology that we have available to us, but the plaintiffs attorneys are already employing. It’s going to make everyone show their cards.

Michael: Got it. I know that you have some thoughts or insights on the role of clusters or networks in the industry and with the majority of agencies participating in some network or another, they’re obviously very, very powerful force. What do you see happening there? What are they doing well and what kind of benefits are they bringing the agencies? I guess, most importantly, what enhancements can they deliver to the value chain or what are they working on now that’s going to make them better?

Chris: I just spoke to the new association of these networks. The advice that I gave was one is that as a network, just gathering a bunch of people together and going to a carrier and say, “Now, I have $100 million more of premium altogether. Pay me more.” That’s probably not going to last. [crosstalk]

Michael: Carriers love that conversation. That won’t last?

Chris: I don’t think that’s going to last for a lot of different reasons. From a best practices perspective, the networks have an opportunity. Some are doing it already to build a model of which the acquisition costs to carriers is actually less versus I’ve got $100 million, now pay me more, where acquisition costs actually increases. Some of it already started building it or have built it. That’s really essential at the network level. The networks also have the opportunity with the right leadership to be able to provide because you could share the vendor costs. They have the ability to really provide some neat services to their members that the member stays 100% alone, they may not be able to do so. [crosstalk]

Michael: Above and beyond, the traditional services of carrier access and contingency sharing.

Chris: Way beyond that.

Michael: Way beyond that.

Chris: Totally beyond that so you could have better IT, you could have better training, you could have better–

Michael: In my conversation with the number they use, they are committing to that. They’re acting like, well, industry leaders, which they are. [crosstalk] They’re making commitments to their network, like carriers are making commitments to their distribution one way or the other.

Chris: Some really are and some really aren’t.

Michael: Fair enough. I’m not going to ask you to name names here, but that’s interesting insight and agents, I suppose you would suggest agents before you joined a network, really do some looking around.

Chris: Definitely look around and really read the potential contracts carefully, make sure it fits you and make sure that the benefits that are being promised are actually truly being delivered [crosstalk]

Michael: Being delivered, talk to people.

Chris: Talk to different people. I know working with these networks, the differences that I see between what actually gets delivered and what gets promised from one to another, man, that’s a big scale there. It’s really a big scale.

Michael: I know that there is another item of concern to you, which is the concentration of premium among the carriers. The consolidation of premium. I’m going to read a couple of notes that I took the last time you and I talked. You said out of 900 carriers, 11 of them, 50% of premium, 90 of them, 89% of premium. Now, getting those numbers right, that’s mind boggling to an industry.

Chris: That’s correct and, again, that’s why there’s going to be- there’s too much cost involved in that in the bottom 810 carriers. [crosstalk]

Michael: For the bottom 810 out of 90, what do you see happening, further consolidation, acquisitions?

Chris: Eight hundred ten have to be consolidated, at least half of them need to be consolidated. Number one is they’re not going to be able to afford the technology and to keep up, the flack can’t.

Michael: Because the investments are huge.

Chris: The investments are huge. Number two, they are going to get adversely selected against if they do not and make this investment in technology. We’re already seeing it to some degree.

Michael: What do you think is therefore for the agency?

Chris: That means that the carriers are going to consolidate and so the price shopper agent that thinks that they- that joins a cluster in network so they have access to 250 carriers, that’s not a rip very good plan, because the carriers are going to consolidate one way or another.

Michael: In the industry, in general, when you see suppliers consolidating, that generally means that more power shifting in their direction. What kind of impact does that have on the everyday life of running an agency?

Chris: Well, it’s an interesting situation right now. We have a bit of a race going on. One might say a race to the death in some way between [crosstalk]

Michael: [laughs] Who is going to race to the death?

Chris: Between whether say 10 distributors can get big enough and state bigger than enough of the company. Whether the companies can stay big enough over these 10 distributors of insurance. They’re both in this race to have the most power. The carriers always are going to have more money, by and large. I think that who’s going to win ultimately is already predetermined. In the process, what’s going to get lost? Then I would argue, what are the opportunities that are left?

Michael: Got it, okay. Talk to us about that.

Chris: The opportunities that are left for an independent agent that is professional in the light of, couple things. As cost occur, if you’re out there buying agencies at three and four times, your ability to invest in growth is quite limited. Your ability to grow enough to satisfy the carrier’s growth needs because it’s hard to grow $500 million of premium versus $1 million of premium by 10%.

A really high-quality professional agency that is taking some of their savings, building it towards organic growth, is going to have a more empty field relative to competitors than maybe ever before. Everybody else is going to be focused on cutting expenses, cutting expenses, cutting expenses. When you’re cutting expenses, affording growth is next to impossible.

Michael: Got it. Some of what you’re saying is music to my ears because I’ve always been an advocate, maybe a champion for organic growth and mastering the skills of organic growth. I think you’re saying it that it’s no longer a privileged decision that you can get around to, it’s an imperative. Is that what you’re saying?

Chris: Yes, I like the way you said that.

Michael: Okay. [laughs]

Chris: Its really a privilege, it’s imperative that we focus. I can tell you flat out and you probably see it all the time. The agencies that are truly committed to professional angle and organic growth are growing pretty quick.

Michael: Right. In a moment, I’m going to ask you how people can reach you, find out more about you, again, how they can read your content, which is excellent. Meanwhile, I’m going to ask you to synthesize this, summarize. In less than 50 words, [laughs] what advice would you give to the listeners who are principles of independent insurance agencies right now?

Chris: Number one, run the agency as you would run the most professional business you could ever imagine. Invest in growth, invest in providing what your clients truly need and that’s professional advice. I’m pretty positive life is going to be very good for you.

Michael: Got it. Those are the ones who are going to scale.

Chris: Yes.

Michael: Okay, love it. Chris, I really appreciate you sharing your insights and observations and the fruits of your research. If people want to find out more about you, learn what you’re up to and get your content, how can they do that?

Chris: The best way to reach me is probably by email and that’s just chris@burand-associates.com.

Michael: I’m going to spell that, it’s chris@burand, B-U-R-A-N-D, hyphen associates.com.

Chris: Correct.

Michael: I got that right. All right. Chris, let’s do this again. This has been a terrific conversation. I really, really appreciate you sharing your wisdom.

Chris: Well, you’re welcome. I’m glad you liked it.

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