Independent insurance agencies are built to manage risk, but most are only focused on their clients' risk profiles, not their own.

Ask yourself this: if a buyer or banker evaluated your agency tomorrow, what risks would they see? What would you learn that you have been ignoring?

Whether you're planning to grow, perpetuate, or sell, the risk inside your own business determines whether you are building something that lasts or something that stalls.

To help agencies see these blind spots clearly, we break risk into three main categories: Performance, Concentration, and Culture and Continuity. Each includes a set of key indicators that, when scored together, reveal the overall health and resilience of your agency.

Here’s what to look for and why it matters:

1. Performance: Is Your Business Healthy Today?

Performance risk reflects how efficiently and profitably your agency is operating. Many owners focus on revenue and new business, but healthy agencies are also monitoring retention, account depth, and loss ratio.

Key Risk Factors:

• Growth Rate: Is your revenue growing organically, or just through rate increases?
• Profitability: How much profit are you truly generating once contingencies are removed?
• Size: Smaller agencies may face greater operational or talent risk due to limited resources.
• Retention: Are you tracking customer, policy, revenue, and premium retention accurately?
• Loss Ratio: High loss ratios erode carrier trust and impact contingency income?
• Policies per Client: A measure of account rounding and relationship strength.
• Account Age: Older accounts often signal loyalty and stability.
• Producer Age: Is your sales team aging without successors in place?
• Transferability: Can client relationships be smoothly handed off, or are they person-dependent?

Why It Matters:
Performance indicators drive your agency's ability to predict and repeat success. Without clarity on retention or profitability, you may be making decisions based on inaccurate assumptions. That creates risk and can limit long-term value.

2. Concentration: Where Are You Overexposed?

Concentration risk occurs when too much of your revenue, relationships, or operations depend on a single point of failure. That might be one producer, one carrier, or a handful of large clients.

Key Risk Factors:

• Owner Dependency: Do all roads lead back to you?
• WASA (Written and Signed Agreements): Are your producers contractually tied to the business?
• Producer Concentration: Is growth driven by one or two people?
• Carrier Concentration: Are you heavily reliant on just one or two carriers?
• Carrier Rating: Are you placing business with financially stable markets?
• Customer Concentration: What percentage of your revenue comes from your top clients?
• Top Ten Customer Dependency: Could you weather losing one major account?
• Niche Dependency: Are you too heavily invested in one vertical or industry?
• Regional Exposure: Would a change in one geographic area significantly impact your book?
• Mix of Business: Is your revenue diversified across personal, commercial, and other lines?

Why It Matters:
Buyers and lenders evaluate concentration risk closely. Too much reliance on a few relationships or revenue streams reduces your agency's resilience and its value. The more evenly distributed your income and influence, the more stable your business becomes.

3. Culture and Continuity: Can You Sustain What You Have Built?

This is where long-term risk lives. Even agencies with great numbers can falter if they lack leadership planning, staffing depth, or scalable systems.

Key Risk Factors:

• Age of Team: Is retirement looming without replacements identified?
• Ownership Structure: Is ownership clearly documented and aligned with your goals?
• Successor Identified and Trained: Do you have someone ready to take the reins?
• Account Management Age: Are your service team members nearing retirement too?
• Relationship Depth: Are client relationships shared across your team or siloed?
• Compensation Plan: Are your incentives driving the right behavior?
• Hiring and Training Plans: Can you reliably onboard and develop new talent?
• Incentives: Do rewards align with retention, service, and growth?
• Documentation: Are your processes and workflows repeatable without verbal instruction?
• Technology: Is your tech stack helping you grow or holding you back?
• Customer Experience: Are you delivering consistent and modern service across the board?
• Leadership Continuity: What happens if you or a key leader steps away?

Why It Matters:
These risks determine whether your business can evolve. Culture and continuity affect morale, retention, and value transfer. When buyers or successors see an agency built on verbal handoffs and aging talent, they see future problems instead of future opportunity.

What To Do Next

Start with a simple self-assessment. Score your agency on each of the 31 risk factors using a scale of 1 to 5, with 1 being high risk and 5 being low. Ask your leadership team to do the same. Then compare and discuss.

You might find you are stronger than you thought. Or you might discover blind spots that have been hiding in plain sight.

If you would like a copy of the full risk assessment worksheet, reach out to our team and we will send it your way.

There is no such thing as a zero-risk agency. But there is such a thing as an informed one. The better you understand your risk profile, the more confidently you can invest, grow, and lead.