Independent insurance agencies have unique financial needs. Unfortunately, few banks truly understand them. Here are three questions you should ask yourself when it’s time to choose the best financial service provider for your agency:
Does the bank understand your unique cash flow? All banks offer business deposit products such as checking and savings accounts, but independent agencies are not like many other businesses: Monthly fluctuations in premium payment volume creates a unique cash management need. A bank that recognizes this difference will offer a range of specialized deposit products to help agents facilitate cash management, while reducing expenses and maximizing value.
Will you be able to get a loan when you need one? Will your bank have a clear understanding of how independent insurance agencies work—especially in the event that you need a sizeable loan for agency acquisition, perpetuation or producer development? Look for a lender that considers your agency's history, the relative stability of its cash flow, the strength of client and carrier relationships and the ongoing potential of your book of business—not just tangible assets.
Is the bank your trusted business partner or just a transaction manager? What level of service does your agency command at the bank? Do you receive accuracy and quick processing? The bottom line: Do you consider your banker a valued and trusted advisor that is dedicated to the financial vitality of your operations?
A bank that specializes in serving independent agents and agency owners is more likely to appreciate the challenges of running an agency and provide the products and services agencies need to grow and prosper. Making the switch may take some time and effort, but it could be one the most important decisions you make.
For information about a bank that understands the independent agency channel, visit InsurBanc online or call 866-467-2262.