Insurance Office Operating Expenses

Insurance Agencies looking to reduce the typical insurance office operating expenses don’t have all the options that other companies have. While COVID changed the culture sending a good percentage of today’s employees home permanently, there is still much comfort in the eyes of the customer that they can, in fact, visit their insurance agent.

But not all is lost. There are significant ways to cut down on the overall operating expenses to become a more profitable insurance agency. Let’s take a look:

Fixed Expenses:

What economics texts books refer to as fixed expenses aren’t really fixed, now. You may be stuck in a 5 year lease but there will be a day that expense can be changed. Here are the big fixed expenses:

1. Rent or Lease Payments – You can reduce your office overhead by choosing a less desirable location or by reducing your office space needs. At $35 per square foot, hiring two virtual assistants could reduce your office space requirements from 2,000 square feet to $1,500 square feet a reduction in rent payments of $17,500.

2. Utilities – Electricity, water, heating, cooling, and internet are sometimes included in a lease. Nevertheless they are all tied to the size of your insurance office location and the number of people in your office.

3. Insurance – Business liability, errors and omissions (E&O), workers' compensation, and property insurance are truly the fixed expenses. They are the cost of doing business for sure, but many go down when you have fewer employees.

Personnel Expenses:

In an insurance office, personnel expenses are the easiest office expenses to change. Hiring virtual assistants can improve the efficiency and reduce the overall number, automation tools can be create or employed to alleviate the need for positions and some tasks you can outsource completely.

1. Salaries & Wages – Compensation for employees, agents, and administrative staff seem high. But what if you could hire one virtual assistant to do what two administrative assistants were doing?

2. Payroll Taxes & Benefits – Social Security, Medicare, unemployment taxes, health insurance, and retirement contributions. These are also dependent on how many employees you have.

3. Training & Continuing Education – Licensing fees, certifications, and professional development aren’t required for virtual assistants. And those that work at companies like Alpine get training and continuing education consistently.

Operational Expenses:

1. Office Supplies – Paper, pens, folders, and other stationery are definitely tied directly to how many people you have in the office. Increase the people, increase the expense. Reduce the people reduce the expense.

2. Software & Technology – CRM, policy management software, accounting software, and cybersecurity tools are surely costs of the job, but software license fees come per person.

3. Marketing & Advertising – Website maintenance, social media, print materials, online ads, and sponsorships. This is an area that VAs can help with because it is very expensive to hire marketing agencies to do simple things like graphic creation, social media posting, email marketing. Save money, and get better service when you hire a virtual assistant to take on some of the role.

4. Postage & Shipping – Mailing policy documents, promotional materials, and client correspondence are all necessary operational expenses of an insurance office for sure.

There are lots of ways to reduce your overall insurance office operational expenses.

Sometimes you have to be creative. If you’d like to talk to us about hiring a virtual assistant to help your productivity, costs and efficiency, learn more about us here.