Our business has evolved significantly over the past 10 years, and winning now requires a fresh approach. Simply put, the F&I provider market is far more competitive than in previous generations. There are ample choices available in structure, provider and agency representation. One could argue that the same was also true 10 years ago at a surface level, but the nuances have grown more complex today. 

Competition is fierce in all markets; dealers are more educated about structures, options and pricing; income development is now table stakes; and the idea of reinsurance is no longer new. How does one stand out, differentiate and continue to grow? Both agency and admin roles are evolving – we all need to continue to adapt or risk being left behind. 

Several factors have contributed materially to the rapid changes in the F&I administrator and agency space. The primary factors here involve the impact of consolidation, a change in the agency mindset, and the idea that collaboration is both necessary and a spectrum. We’ll unpack each of these and explore how one might thoughtfully navigate the topics on behalf of their agency or admin company, as applicable. I’ll also offer guidance on how to build out your own plan based on your current market position:

The Impact of Consolidation

One undeniable factor shaping our market is industry consolidation. The historical model was admins buying admins and agencies buying agencies. That led to consolidation in the space, and the acquisitions bolstered the capabilities of the combined company. Over the past decade, administrators such as IA, Portfolio, Acrisure and APCO have acquired agencies, as well as agencies such as Brown & Brown and Spectrum Automotive Holdings (formerly Vanguard) acquiring administrators. While this now seems commonplace, the ultimate result is that the traditional lines between administrators and agencies are forever blurred. 

The Agency Mindset vs. the Broker Mindset

Another major shift, likely accelerated by consolidation, is the evolution in the mindset of the agency principal. Traditionally, agency mindset was primarily vehicle service contract-focused, more limited in product offerings, and centered on one or two core providers. While there are still lots of successful agencies that follow that playbook, we have seen a shift within many from an agency mindset to a broker mindset. 

On the surface, a broker mindset starts with working alongside multiple administrators instead of primarily representing company X. The impact of consolidation has certainly accelerated the change, as the large consolidator agencies represent most providers and promote that as part of their value propositions. 

I would argue that the true value of a broker mindset, instead of all the provider options, is the mentality behind it that has the most value. The shift from representing company X to taking a consultative approach and bringing the right solution forth for the dealer substantially changes the narrative. What if we went in educating a dealer on solutions, asking questions, finding the thing that was broken or substandard, and offering to put together a plan tailored to helping improve business? Relationship and service first, products and widgets second.  The shift may seem simple, but it’s an impactful one. In my experience, you never go wrong when you prioritize the dealer’s needs first. 

So here we are in an environment where admins and agents share ownership structures, agencies do business with multiple admins and vice versa, and all the old lines have blurred. Where do we go from here?   

Collaboration Is a Spectrum

Despite all the changes our industry has experienced, some important things remain the same. Relationships matter, as do loyalty, credibility, competence and reputation. Those are the traits that become our currency for collaboration. All of us, administrators and agents alike, value others with those characteristics because they form a foundation of a trusting relationship. 

Here's how I view the collaboration spectrum: 

•          Partners: our closest collaborators, the obvious and easiest group to work with

•          Friends in the business: You each bring different strengths to the table. With mutual trust and credibility, collaboration comes naturally.

•          Friendly competitors: Not your direct rivals but those whose value propositions serve different niches. For example, Portfolio is known for flexible reinsurance programs and risk management. Outside of that core, other companies excel in complementary areas. We’ve chosen to partner with some of them to expand our offering—integrating their programs into our ecosystem and giving our agency partners more tools within a single agreement. Everyone wins.

•          Frenemies and direct competitors: This is where collaboration ends. Sometimes you're simply not on the same team—and that’s OK, too. 

Where Do We Go From Here?

By all indicators, consolidation will continue in the agency and administrator markets. The influx of private equity and public company capital has changed how both agents and administrators must think and operate to remain successful. 

Here are some practical suggestions for positioning you and your company for success in the future: 

1)        Invest in high-trust relationships.

Strong relationships remain the foundation of sustainable success. Be the partner you’d want to have. With trust in place, deals come together more easily.

2)        Practice clear, honest communication.

Transparency fosters collaboration and eliminates roadblocks. This is especially crucial when an agent works with multiple carriers, or an admin partners with multiple agents in the same market. Proactive communication always pays off.

3)        Critically evaluate your go-to-market strategy.

Ask yourself: How would someone disrupt your model? Where are you not best-in-class? Identify your weak spots—because your competitors certainly will.

o          Agents: Are there gaps in your product toolbox? How strong are your training resources? Do you offer anything new, exciting or unique? Give it real thought.

o          Administrators: Refine your distribution model. How do you show up for agents and add real value? What makes your offering more than just a “me too”?

4)        Commit fully.

Success tends to follow those who consistently invest time, energy and intention. The most committed partners will win over time—so lead with that mindset.

5)        Always serve the dealer’s needs.

Their success ensures yours. Build your business around helping them thrive. 

There have been many changes over the past decade. Choosing a different approach to growing your business can help you innovate, evolve and continue to prosper in a competitive market. That commitment to continuous improvement, along with your relationships and desire to do what’s right and add real value, will position you well to reach the next level of your career, agency or administrator enterprise. 

EDITOR’S NOTE: This article was authored and edited according to Agent Entrepreneur editorial standards and style. Opinions expressed may not reflect that of the publication.

Ryan Hanlon serves as Chief Sales Officer for Portfolio and has worked with agents and dealers in a reinsurance management capacity since 2004.  To continue the conversation, send a note to ryan@portfolioco.com.