3 Line Items You Can Remove from Your 2024 Budget

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This post is part of a series sponsored by AgentSync.

It’s that time of year again

Fourth quarter is a busy time for nearly everyone, both inside and outside the insurance industry. You’ve got spooky season, fall and winter holidays on the horizon, and let’s not forget budgeting for the year ahead. Hours- or days-long financial planning sessions are practically an autumnal tradition!

Budgeting can be an exciting time, when you get to look ahead to everything you’ve got planned for the next year. It can also be a stressful, nightmarish battle with other departments over access to limited resources. Even though 2023 turned out to be the year of the recession that wasn’t, and the U.S. gross domestic product (GDP) has been increasing for five consecutive quarters, businesses remain cautious about spending money.

In the insurance industry, perhaps more than in other areas of the economy, being financially prudent makes sense as claims costs continue to rise faster than premiums and reinsurance becomes more expensive to procure. At the same time, the industry keeps growing its headcount, reaching a high of more than 2.9 million people, according to preliminary September 2023 data from the Bureau of Labor Statistics (BLS). The BLS also reported an extremely low unemployment rate of just 1 percent. These numbers point to just how high the demand for insurance industry workers is.

Expanding business; shrinking costs

It’s no wonder that insurance carriers, agencies, MGAs, and MGUs are stuck between a rock and a hard place. On one side, profitability isn’t guaranteed and remaining solvent needs to be an insurer’s top priority. On the other hand, the industry’s workforce continues to grow and insurance businesses rely on these workers to do everything from sell and service policies to settle claims, investigate fraud, and numerous other functions that don’t even seem to be “insurance” related.

So, what can you do when you’ve got to keep your budget as lean as possible while ensuring every employee on the payroll is working as efficiently as they can? This is where technology purpose-built for the insurance industry can be a life saver, a cost saver, and a sanity saver. If you’re knee-deep into your 2024 budgeting and wondering how to make the math add up, we’ve got great news. Here are three common line items you just don’t need to be paying for, and you can cut them from your budget.

How to cut line items from your budget

1. Eliminate unnecessary producer licensing fees

We all know that every insurance agent, broker, and producer is required to have a valid license in both their resident state and any state(s) they sell, solicit, or negotiate insurance in. Maintaining these licenses is an entire job in and of itself (and more on that later) with costs that can multiply exponentially before you know it.

Some organizations err on the side of caution, and we don’t blame you at all, but that can mean paying licensing fees for producers who aren’t selling anything in a state you’re maintaining their license in. And incomplete producer applications or license renewal forms can result in the state canceling the application but keeping the fees. While these unnecessary licensing costs add up on their own, you can also add in the costs of additional staff hours it takes to manage producer licensing for lines of business, and within states, where there’s no reason to be doing so.

2. Eliminate unnecessary state appointment fees

Just like each insurance sales person has to be licensed, they also have to be appointed by a carrier to sell that carrier’s products in most states. And, no surprise here, this also has to be done state by state. Paying to appoint producers is a no-brainer when that producer is making sales. But all too often carriers are paying – and paying big! – to keep active appointments for producers that haven’t sold their products, or sold any product in a particular state, for quite some time.

Moreover, without a system in place that provides robust reporting, it can be nearly impossible for an insurance carrier to accurately identify which agents haven’t been using their appointments and are safe to terminate.

3. Cut out costly consultants or temps

Whether it’s time spent getting new producers onboarded and ready to sell, time spent managing each license renewal for each state, or time tracking which carriers appointed which producers and where, a lot of time goes into producer compliance maintenance. For many organizations whose internal staff is just too small to handle this workload, turning to consultants, contractors, and temps seems like the best solution.

Unfortunately, this approach rarely benefits the company, the producers, or the bottom line. A more likely scenario is that companies are spending money on third-party consultants while still paying internal staff to manage the contractors, double-check and reconcile their work, or even catch and clean up their messes. Producers still suffer the frustrations of extended onboarding timelines, the hassles of repeatedly completing state-specific forms, and the risks of their licenses getting renewed late or lapsing.

How to save money and time while reducing compliance risk

Now that we’ve told you three specific costs you can wipe from your balance sheet next year, you’re probably wondering how to do it. It’s not too good to be true: Your organization can save real money and make employees and producers happier by adopting a modern compliance management solution. Not to mention, all that plus virtually eliminating the risk of producers selling outside of their license or without a carrier appointment fully in place.

Here’s how AgentSync makes it possible:

  • With robust reporting capabilities and an easy-to-read Producer Scorecard, the licensing team can see precisely who’s licensed in which line of business and in which states. This means the ability to assess who really needs to be licensed in what, and where.
  • Activate or terminate licenses in just a few clicks, all from within the AgentSync system – no need to visit each state’s website.
  • Check in and take action on producers’ license statuses and requirements from the start of the producer lifecycle to the end.
  • See which producers are appointed where and make informed decisions about which appointments to keep paying for (or not) based on real-time data.
  • Consolidate distribution partner data to view the most up-to-date information on contact details, license status, appointments, and regulatory actions.
  • Take advantage of Just-in-Time (JIT) appointments, where you only pay appointment fees once a producer has written business.

Ready to cut some costs and reallocate funds in your 2024 budget?

We know there’s got to be something more fun to spend your 2024 budget on than extraneous producer license and state appointment fees or extra hands to manage a highly manual process.

If cutting one or more of these line items from your budget sounds appealing, it’s time to check out AgentSync and see how we help insurance carriers, MGAs, MGUs, Agencies, and everyone in between reduce costs and eliminate compliance risk, all while providing an easy and modern user experience.

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