Insurance agency financials play an important part in painting the overall picture of an organization’s health and performance. This information is reviewed and used by agency owners and leaders to make strategic decisions for the company. And while this information is most critical to owners and leaders, there can be a curiosity among employees regarding the agency’s stability and success.
Some agencies may keep most (or all) financial information locked down while others are willing to share specific details more freely. And while there may be a desire for complete transparency when it comes to agency financials, there are critical points leaders and employees must keep in mind when discussing this type of information.
1. There is no requirement for agency owners to disclose financial information –
While there may be a general curiosity among some employees to have access to financial information, this does not create an obligation for ownership to disclose details. The only information an owner must provide to an employee is that individual’s wage or sales and lost business data for those in a production role. Anything outside of that is really up to leadership’s discretion to decide what is appropriate for staff and what is discussed only with those making financial decisions.
The depth of financial information agency leaders choose to share with the rest of the company will vary from organization to organization. It could be as straightforward as sales and retention or more detailed like overall revenue, profit, and contingencies.
2. Financials are complex –
Financial information for any company can be full of complicated information and cause more confusion. This confusion can occur when an employee sees a Profit & Loss statement for the first time or a staff member with more sophisticated accounting abilities. Very rarely is this information black and white. One financial statement may show specific figures, but not account for other factors that impact the bottom line.
Both leaders and employees need to understand there are complexities when looking at the agency’s financial information. Most of it is not easily digestible, especially to those who lack experience looking at financial reports. Without taking the time to simplify and explain financial information to employees, it can create a misunderstanding leaving employees with more questions than answers.
3. Address specific concerns individually –
A certain level of interest when it comes to the financial health of the agency is natural. Employees want to know that the company is stable and that jobs are secure. When agency leaders are willing to share high-level financial information about the organization, it can provide the reassurance most employees are seeking.
However, some individuals may have specific concerns. Ignoring this can create distrust with the employee and cause the employee to seek answers or sympathy from coworkers. It is best to provide that specific employee the opportunity to share questions and explain what is causing uneasiness. Taking time to address the individual’s needs will help minimize their stress and should prevent those fears from spreading to other employees.
There is no one right answer when it comes to when, how, and what financial information agency leaders should share with employees. Using the information above will help leaders find clarity and prepare for those conversations.
For more on this topic, check out the full topic of The Independent Agent here.
About the Author
Justin Goodman has spent the past 20 years in insurance. He is the co-founder and CEO of Total CSR and co-founder and Managing Director of Project 55. By the age of 29, he was recognized as one of the top five construction insurance experts nationwide by Risk and Insurance Magazine. He also was named to Insurance Business Magazine’s Hot 100 and most recently the 2024 Insurance Journal Agent of the Year. Justin has trained over 50,000 CSR’s, account managers and producers through his work at Total CSR. He has a passion for developing the next generation of insurance professionals. When not with his family, he devotes his free time to speaking engagements and advising agency owners across the country.
