Adam Mitchell, CEO, Mitch Insurance For many years, we’ve all heard – and have probably said at some point to our teams, partners or peers – that the future is coming. It now feels like the future is here.
Massive tech companies and Amazon have started to get into insurance. Embedded auto insurance with car companies is happening. Consolidation continues to change the distribution landscape and a dozen large-scale, national mega-brokers control a larger portion of the market. They have deep pockets, voracious appetites and it’s safe to say M&A is unlikely to slow down anytime soon.
A quote I often use is, “Just because you’re paranoid doesn’t mean they’re not chasing you.” It wasn’t that long ago you would have been called paranoid for worrying about everything above. But it’s all here now. It’s happening.
So what does this mean for brokerages? It’s important now to create a path toward scale that allows you to invest heavily in talent, technology and long-term growth. Or, you need a plan to sell or partner with a larger entity. Basically, you need to be big enough to sustain the fight independently or join another group to do so. I think the time when small brokers are going to be able to survive on their own is coming to an end. We’re already starting to see this.
Going forward, the biggest and best brokerages will prioritize innovation and significant technology capabilities. Simply being a four-person shop that’s really good at brokering is no longer enough to compete. You need to do so much more. Ongoing learning and skill development at all levels of the organization is crucial, and your leadership team needs to have smart business people. Strategic planning is key; also, you must ensure you’re allocating the necessary resources, working with the right talent and unlocking capacity to properly execute your plans.
With a potential recession looming, the year ahead is going to be another memorable one for our industry. Make sure you’re prepared for it now.