Bits and Bytes or Bricks and Mortar

Conflict Resolution in Insurance Agencies

You tell your clients and your carriers that your agency staff is not just professional and expert in their fields, but are also one big, happy family, but underneath it all, you and your partners do not get along very well, your managers are constantly at each other’s throats, your producers hate the service and marketing departments (and vice versa), and your employees are constantly bickering (and bringing you into the middle of their petty problems).

While most agents do not face all of the situations pictured above, too many have to deal with one or more of them. This article will address how and why conflicts arise and how to deal with them.

The core of most conflicts is differing opinions more than personal enmity, but human beings will always have differing opinions. The accelerant that turns these differences into (sometimes) bitter conflicts is usually “bad times”. Have you noticed that when business is good and profits are strong, we have little problem overlooking the “warts” on our fellow employees and partners but when accounts are lost, new business is rare, or carriers do “bad” things to the agency, every “wart” turns into an unbearable deformity.

This does not imply that conflicts do not occur in good times, as well. However, they are treated with more understanding when the money is flowing than when everything appears to be stacking up against you.


Whenever you have more than one owner, conflicts are bound to arise. The best scenarios occur when owners have opposite drives (one is an ‘A’ personality while the other is a ‘B’). These partners find it easier to live with each other’s differences than owners who are both the hard driving ‘A’s, until bad times arrive. Multiple ‘A’ personalities in ownership can argue while each makes a million dollars a year. Conflict is a contest that they enjoy and in which they will participate just to see who comes out ahead. ‘A’/ ‘B’ partnerships will get along until hard times occur, then will tend to experience deeper conflict than that of the multiple ‘A’ owners.

Owner conflicts tend to resolve themselves in three distinct ways, Avoidance, Separation and Mediation. Avoidance ranges from ignoring the points of conflict to ignoring each other completely. It rarely solves problems. Avoidance causes problems to simmer and grow, sometimes for years, until they become so caustic that a relationship cannot be mended, even if the problems can be rectified.

Our merger and acquisition efforts sometimes encounter partner disputes at their terminal levels. The owners would rather merge, sell or separate than resolve the conflicts with each other. We often try to manipulate the situation into Mediation, but if a conflict has gone from subject based to personality based, this is often untenable. In the best of cases, the agency is split or the owners affiliate with other entities. In the worst of cases, the agency is sold and two or more owners in the prime of their lives find themselves in bitter retirement.

The best resolution to owner conflicts is in Mediation. We are members of the American Arbitration Association and, while formal arbitration is rarely needed in owner conflict cases, we often mediate owner disputes to acceptable resolutions in two ways; obvious answers that simply need an objective, third party to affirm, or “out-of-the-box” solutions that have evaded all participating parties because they have been too close to the problem to see potential resolutions. Either way, the fences are mended and business can resume.


Producers are typically in conflict with service and/or marketing departments in agencies. The reason for this is the personality differences and differing goals between these groups. Producers are relationship driven with closing the sale as their primary goal. Service and marketing staff are driven by detail and high quality efforts. Their goals are protection of the agency through thorough underwriting and attention to the details that the carriers need to maintain strong trust relationships with the company underwriting staff. Obviously these personalities and goals come into conflict with each other. Without management intervention these differences could cause schisms that embitter the employees against each other in general terms. They will pick at each other at every opportunity to impress on you, the boss, that the other group is less concerned with the agency than they are.

The answer to these conflicts lies in Team Building. The long term goals of both producers and service/marketing staff are the same, grow the agency (and their compensation levels) through new business and the maintenance of renewals. In truth, these groups need each other because without the relationship and sales efforts, the agency would not achieve the growth it needs, and without the care to detail the agency would not maintain the relationship with the carriers that promote their cooperative efforts on behalf of the agency. In the heat of the battle, both groups forget this mutual dependence. Team Building forces them to acknowledge their co-dependence in such a way that each group would certainly fail without the other. Team Building begins with the assignment of producers and marketers/servicers to account development and maintenance. Making each responsible for the same accounts in practice requires them to work cooperatively. More importantly, cross-pollinating their compensation programs makes the teams work effectively. This means compensating the producers, in part, on the ‘hit ratio’ of the marketers and compensating the marketers, in part, on the volume of new business written by their corresponding producers. The service/producer relationship is managed the same way based on compensating servicers on book of business growth (usually through added accounts by their producer-partners) and the producers on retention (of course, through the commissions that they maintain on renewals).

If these team concepts are properly explained and managed, in time the producers and marketers and servicers all pull the oars in the same direction at the same time in order to move the agency forward as quickly as possible since the “win” pays them all.


These issues arise when times are either bad or when the employees are bored and without active goals to pursue. Nitpicking and politics arise. They will always try to get their manager involved since involvement implies that the manager must take sides. In smaller agencies the employees try to involve the owners (specially when there is more than one owner and each is pulled by a different group of employees). Things get exciting when one owner champions one group and a second owner champions the other group. Resolution of these conflicts should be managed in one of three ways. First, provide the employee group goals and challenges (even if you must create them) that will require them to work together. This is the best way to manage these conflicts because real objectives requiring team efforts clear petty conflicts in favor of doing the job that the employees are qualified and trained to perform. The second way to resolve employee squabbles is to refuse to play. If the manager or owner simply stays out of the fray and tells each person or group that this issue is beneath both the manager and the employee, the issue often dissolves. The final way to resolve the issue (to be used only when the conflict disrupts the agency’s operation or performance) is to play the role of Solomon. Tell each person (or group) involved that in the interest of the agency’s performance and efficiency, you are prepared to “hold trial” if they cannot resolve this amicably amongst themselves. However, your decision is final and the only path available to either party if they disagree with your decision is out the front door. Few conflicts are serious enough to be worth quitting over and your decision as manager and/or owner must be acceptable to employees who desire to continue working for you. Once you have heard all of the evidence from both sides and you render a decision, NEVER, retract or change it. It makes you appear indecisive and you will be repeatedly taken advantage of in the future.

In conclusion, life is too short and no business is important enough to consume personal emotions. Business (even your own) is only a way of making a living to support the really important things in your life, health, and family. Emotions should be reserved for those critical issues in life. Business may be troublesome at times, but should be generally a pleasant and satisfying way of earning a living, whether you are an agency owner, producer, or service employee.

The only exception we have seen in this process is when a person’s personal life is in such disarray that they carry their emotional distress into their workplace. This is extremely disruptive to both the personal and business life and should be treated by a qualified counselor. If the problem is an owner, someone must alert him to that fact and suggest outside counseling. If the problem is with an employee, the owner must make the suggestion, but must also guard against becoming that counselor. An insurance agency owner is rarely qualified to provide personal counseling and opens himself to serious liability issues if he becomes personally involved in employees’ outside problems. If the recommendation is not heeded and the disruptions continue to affect the employees’ business life, termination must be considered.