5 Ways to Control Expenses as an Insurance Agent

In this highly competitive Insurance market reducing your expenses can be a great way to increase your profit margin.

Don't get me wrong Expenses are a necessary part of any business. They vary business by business and person to person. But when expenses start to spiral out of control, it eats a big portion of your profit, or in the worst case makes your business unprofitable.

That’s why it’s always important to have some form of plan in place to control your expenses.

So here are 5 proven ways to quickly reduce your expenses as an Insurance Agent-

1. Create and Stick To a Budget

You should have a budget in place that covers all of your expected expenses and leaves room for any unexpected costs as well. It should be realistic and reviewed regularly to make sure that it still makes sense for your current financial situation.

A budget can be made by looking at each spending category and understanding your spending habits.

Another must thing to do while sticking to a budget is keeping track of your expenses, no matter how little it is. Whenever any expenses are incurred, you should be keeping the receipts and tracking them on a spreadsheet. So you have a clear idea of exactly where you are spending or overspending your money and when it comes to your business’s tax return, all of your expenses can be deducted.

2. Follow the path to paperless

With today’s greener business initiatives, creating a paperless environment is almost unavoidable. The fact is, managing paper is a bulky and expensive process, incurring costs associated with labor, paper, ink, storage, shipping, and disposal, just to name a few.

The first step to going paperless is rethinking old processes with a digital mindset. Simple changes, such as online applications and electronic signatures, can quickly add up to noticeable savings. You can also replace fax machines with e-fax services that allow you to send and receive documents as PDFs via email. Online payments, both inbound and outbound, can reduce expenses while improving the entire customer experience at the same time.

3. Eliminate Unnecessary Purchases/Expenses

Nowadays people buy a lot of unnecessary things based on emotions. If you see something that you feel would be beneficial to your business don’t buy it right away. Take the time to think about whether you really need the object - you’ll soon realize that most of the time you don’t.

Understand the difference between need & want. There's a large margin of gaps between those two things; realize that gap before you make a big purchase.

If you find any unnecessary purchases or services then make sure to check your expense tracking sheet and ask yourself how many of those purchases brought real value to your business.

4. Improve customer retention

Acquiring a new customer is much more costly than improving customer retention to get repeat business from a previous customer. In a market where most of the insurance agents are running after new clients and not focusing on building long-term relationships, Building a great relationship to increase your customer's retention can be a great way for you to cut down your client acquisition cost & reduce expenses.

Think like You’re in the relationship-building business, not customer acquisition.

At the end of the day, you the insurance agent, need to nurture personal relationships to get more clients and increase client retention to bring down the cost of acquisition. Focus on?converting loyal clients?into active promoters and you’ll cut costs on client acquisition - This is a great way to reduce expenses.

5. Automate or Outsource Vital operations and processes

Insurance agencies & agents can have massive financial benefits by outsourcing or automating various aspects of their operations, such as underwriting, data processing, accounting, payments, and claims handling — including adjudication and fraud investigation.

Insurance agents or agencies can significantly reduce administrative costs by automating some of the processes associated with those areas.

Leveraging the power of business process outsourcing (BPO) allows companies to reduce admin expenses by a large margin while streamlining front- and back-office operations.

Underwriting: Underwriters can take advantage of digital data processing power, allowing them to collect and analyze policyholder information with the click of a button. Whether you outsource or implement your own data analytics software,?automation frees up the time & money you are spending on underwriters.

Payments: Automated payments create a positive customer experience and improve the likelihood of consistent, timely payments. Digital reporting also takes the responsibilities of accounting, customer service & collections - so you can save some cash that you are spending on those services.

Claims: Claims are an especially exciting area where automation is benefiting?insurers and policyholders. Options can include online First Notice of Loss (FNOL) forms, data collection, fraud detection, and digital payments. Because claims is such a high-impact touch-point in the customer journey, improving efficiency through automation can significantly affect retention and persistency.

This is where we come in, we can provide you fully trained Virtual Assistant/Remote Employee, specially trained to work with insurance agents and handle those insurance-related tasks.

Conclusion

Actual cost control is a key element of running a successful business.

By putting some of these tips in place you can take a step toward your overall expenses and take control of your financial situation. So the next time you look at your expense report, you can let out a sigh of relief.