Four keys to small commercial success for independent agents

Independent insurance agencies are re-focusing their efforts to manage small commercial lines as efficiently as possible. But while some winning agencies are able to grow through acquisition, true organic growth has been difficult to generate for many agencies.

In addition, more carriers are competing for business directly through alternate distribution channels. With more than 30 million small businesses in the U.S., the small commercial industry still represents a significant growth opportunity for agents. But accomplishing growth while maintaining margins requires a disciplined approach.

Agents have charted many different courses to success in small commercial. The best agents share a common commitment to the following best practices:

  1. Partnering with a carrier committed to helping agents succeed. Given the emerging trend among some carriers to build direct distribution channels, many agents appreciate carriers who build their businesses specifically around the needs of agents and their customers.
  2. Dedication to operational best practices. Agents who drive high margins in small commercial lines are committed to key operational tenets, such as leveraging carrier service centers, having dedicated small commercial units, limiting the use of wholesalers and placing accounts with a single carrier with the same effective dates.
  3. Partnering with a carrier that offers true consolidation capabilities. Agents expect their carrier partners to help them through their consolidations. Only a select few carriers have the dedicated resources necessary to help agencies migrate and manage the business.
  4. Seeking dedicated underwriting and sales teams from carriers. Carriers with dedicated teams offer competitive, market-based pricing that minimizes disruption for an agency’s customers.

The sheer size of the small commercial market represents tremendous opportunity for agents. By refining their processes and applying industry best practices, many agents have created strong and profitable businesses that will provide them with competitive advantages going forward.


U.S. Small Business Administration


Chip Hamann picture

About the author
Chip Hamann serves as The Hanover's Small Commercial chief underwriting officer. In this role, he leads a team responsible for determining the underwriting strategy, state management, product and point of sale offerings. He also oversees the field underwriting teams. He and his team partner with actuarial, product, technology, corporate underwriting and marketing to continually assess and evolve The Hanover's underwriting strategy and best practices to help position The Hanover as a carrier of choice for agents in Small Commercial.



This material contains suggested guidance and is provided for informational purposes only. It does not guarantee any particular outcome and is not intended as an endorsement of any of the entities mentioned therein.

LC SEP 2018-450