For the past several years, independent agencies have navigated a hard market defined by rising premiums, limited carrier appetite, and difficult client conversations. Now, signs are emerging that conditions are beginning to shift. But what does that transition really look like at the agency level?
Recently, Jeff Smith, CEO of IA Valuations and OIA, sat down with agency leaders Brent Phelan of Phelan Insurance Agency, Brian Ogle of Element Risk, and Brennan Madison of The Frederick Agency to discuss what they’re seeing in their markets and how agencies can position themselves for growth as competition returns.
Their conclusion: while the market may be softening, agencies that succeed will be those that stay proactive, deepen relationships, and adapt their sales strategies.
Is It Really a Soft Market?
Industry headlines point to encouraging signs. Underwriting results have improved, premium growth is moderating, and some regions are even seeing rate decreases. Agency leaders caution that the transition isn’t happening uniformly.
From his perspective as a small agency in northern Ohio, Madison believes many agencies are still in the early stages of a market shift. “I still feel like we’re at the beginning of the softening market, not the soft market.” Ogle echoed that sentiment, noting that pricing trends vary by line of business. While some segments have flattened considerably, others remain more challenging.
For Phelan, however, the evidence is clearer. “We are absolutely seeing a soft market.” Yet, he was quick to point out that a soft market is not inherently better or worse for agencies; it simply requires a different approach.
Carriers Are Changing Their Playbook
One of the most noticeable changes agencies are experiencing is carrier behavior.
During the hard market, many underwriters restricted appetites, tightened guidelines, and limited opportunities. As conditions improve, agency leaders report a renewed willingness from carriers to compete for business.
Phelan described the difference this way: “We go from a hard market, where it feels like the underwriters forget that we are their client, to a soft market where we become their customer again.”
Agency leaders reported seeing greater underwriting flexibility, expanded appetites in classes previously avoided, more aggressive pricing, increased interest in quoting business that carriers declined just a year ago, and new production incentives designed to accelerate growth. That creates opportunity, but it also requires agencies to avoid relying on yesterday’s assumptions.
As Ogle noted, “It’s the discipline to not assume last month is this month.”
More Opportunity Means More Work
Many agency owners assume a soft market makes life easier. The panel largely disagreed.
Clients may appreciate seeing flat or declining renewals after years of increases, but agencies are also finding themselves spending more time on marketing, carrier negotiations, and remarketing opportunities.
“Everybody wants to quote everything,” said Phelan. “They all want a last look.”
That competitive pressure increases workload for service teams and producers alike.
At the same time, agencies have an opportunity to shift conversations away from simply managing premium increases and back toward risk management and coverage improvement. The guests emphasized using premium savings to strengthen protection rather than focusing solely on lower prices. As carriers become more aggressive, agencies that maintain a consultative approach are more likely to stand out.
Growth Requires a Different Mindset
The discussion also explored how growth strategies evolve in a softening market.
While none of the panelists reported significant changes to their long-term goals, they acknowledged that achieving those goals becomes more challenging when premium inflation is no longer doing some of the work.
Phelan explained that slower premium growth, combined with potentially lower retention as competitors become more aggressive, creates a tougher math equation. Even agencies producing record levels of new business may find overall growth rates moderating.
That reality places even greater emphasis on relationship building, coverage expertise, and proactive account management. According to Madison, “Both hard markets and soft markets, handled the correct way, have tons of opportunity.” Rather than chasing price, he encouraged agencies to focus on helping clients improve coverage and identify long-term value.
Talent Still Matters Most
One area where the panel showed strong agreement was talent development. Regardless of market conditions, all three agencies remain committed to investing in producers and future growth. None reported reducing hiring ambitions because of market changes.
What they are looking for varies somewhat by agency size and strategy, but a common theme emerged: character, adaptability, and relationship-building skills matter more than technical expertise alone.
As Madison explained, “We’re much more interested in finding the right person and figuring out how they work.”
Technology Is Becoming a Competitive Advantage
The last part of the conversation focused on technology and artificial intelligence (AI), and the conversation revealed broad adoption across agencies of all sizes. Smaller agencies see AI as a way to compete more effectively with larger organizations by improving efficiency and expanding capabilities. On the other end, larger agencies are using technology to reduce administrative work and create more time for producers and account managers to focus on client relationships.
Perhaps the most memorable observation came from Ogle: “No tool makes a good producer. But if you have two good producers, equal in ability, the one that’s going to win is the one that uses the tools.”
Phelan shared a similar perspective, emphasizing that technology should enhance people, not replace them. “It doesn’t necessarily make a low performer into a high performer, but it takes a high performer and takes them to the moon.”
The Bottom Line
While market conditions may be changing, the fundamentals of agency success remain remarkably consistent. Carrier appetites will expand and contract. Pricing will rise and fall. Competition will intensify. But agencies that invest in relationships, educate clients, develop talent, and embrace technology will be positioned to thrive regardless of the market cycle.
As independent agencies move into the next phase of the market, the challenge is not simply responding to change. It’s using that change as an opportunity to strengthen client relationships, improve coverage outcomes, and build sustainable growth for the future.
Whether the market is hard, soft, or somewhere in between, understanding your agency’s value can help you make more informed decisions about growth, perpetuation, acquisitions, producer compensation, and long-term planning. If you’re evaluating future opportunities, planning for succession, or simply want a clearer picture of where your agency stands in today’s market, IA Valuations is here to be a resource. Contact Jodie Shaw at jodie@iavaluations.com or (614) 552-3036 to start planning for tomorrow, today.
By: Colleen Elliott
Colleen Elliott is the Marketing & Communications Manager on the IA Valuations team. A graduate of The Ohio State University’s Fisher College of Business, she has a background in sales, marketing, and communication. Colleen manages marketing campaigns, communications with agents and state partners, and helps the IA Valuations team from an operational perspective.
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